Final bid to save Le Meridien hotels

FRANTIC talks were continuing last night to avert the threat of administration which hangs over the Shelbourne hotel's owner, Le Meridien.

Today is the due date for a crucial rental payment for which there is no funds.

Bankers behind the chain have been grappling with the crisis last week without resolution and have been locked in talks all weekend in a desperate bid to keep the hotels out of the hands of administrators.

Last night, Le Meridien's spokesman Robin Walker said talks had continued all weekend but no agreement had yet been reached.

Le Meridien has to stave off a €28 million rental payment, due today to Royal Bank of Scotland which bought into 12 of its hotels, including the landmark property on St Stephen's Green, in a sale and leaseback arrangement.

The 14 banks which are owed stg£700 million by Le Meridien, face the prospect of losing most of their debts if Royal Bank of Scotland cannot be persuaded to defer the rent.

Friday's deadline for reaching a refinancing agreement was breached to allow talks continue all weekend. Lehman Brothers is believed to be trying to convince other lenders to accept a proposal for a lifeline to the business.

Such a deal is crucial for Lehman because it has even less of a chance of recouping its stg£230 million because its position as a secondary lender puts it behind the 14 banks in the queue of creditors.

One weekend report said Lehman has put a proposal on the table to inject about stg£150 million cash into the business and allow the main lenders to take control.

Lehman Brothers spokeswoman Mary Matthewson declined to comment on negotiations yesterday.

Any move to put the hotel group into administration would be drastic as it would mean a fire sale of prime assets at a time when they could not be guaranteed to reach high prices.

The prestigious London hotels, the Waldorf and the Grosvenor are also owned by Le Meridien.