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KHH Cirencester - Case Update

Ian Corfield and David Hudson of FRP Advisory, the joint administrators of KHH Cirencester Limited, have sold the Kings Head hotel in Cirencester out of administration to pub giant W.H. Brakspear & Sons for £8.62 million following a couple of adjustments to the agreed to purchase price.
KHH Cirencester—which was incorporated in late 2016 for the sole purpose of owning and managing The Kings Head Hotel—was placed into administration in November 2024 by Catalina Acra Reinsurance Trust, a secured creditor owed approximately £27 million. Similar to other operators in the hospitality industry, the hotel was severely affected by COVID-19 and successive national and local lockdowns, followed by rising utilities prices and the cost of living crisis.
At the time of the appointment, KHH employed 88 staff members, and the hotel had 88 rooms inclusive of 11 self-serviced apartments which were owned by another group company. Due to restricted cashflow, a sale of the business and assets had to be completed at the earliest opportunity.
Three offers were ultimately received by the administrators. Brakspear’s indicative £9 million offer was deemed to be the best offer received since it was not subject to funding and did not include any deferred consideration. However, during the due-diligence period, Brakspear advised that its initial offer incorporated the brasserie which led into the hotel, which was owned by another group company. It was ultimately decided that a 35-year lease would be granted and Brakspear's offer would be reduced to £8.625 million.
Brakspear also identified that one wing of the hotel may not be compliant with fire risk regulations, resulting in the deferral of £200,000 of the total consideration which will become payable should the access to the fire escape be formally granted within a three-month period.
Interestingly, on learning that the administrators were close to concluding a sale to Brakspear, another interested party that had previously made an offer increased the offer to £8.75 million, subject to board approval. Given the progress made with Brakspear at this time, the administrators rejected this offer to conclude the Brakspear sale, which adds to Brakspear’s already significant portfolio. All 43 remaining staff jobs were saved.
Read the joint administrators’ most recent progress report HERE. They have been assisted by Mishcon de Reya, Colliers, JLL and Hilco.