Tuesday, July 8, 2003 | 11:24 a.m.
SUN STAFF AND WIRE REPORTS
A company that has a marketing alliance to steer European customers to The Venetian hotel-casino in Las Vegas is battling to stay out of bankruptcy.
Le Meridien Hotels, the operator of London's Grosvenor House and the Hotel Eden in Rome, said it delayed a rent payment and raised a loan to avoid bankruptcy.
Le Meridien, formed by Air France in the 1970s, is struggling to pay its bills after demand for rooms slumped as stumbling economies, the U.S.-led war in Iraq and the outbreak of severe acute respiratory syndrome prompted travelers to stay home. London-based Le Meridien has more than 130 hotels.
"Ongoing positive discussions with key stakeholders encourage the board to believe that the future of the group should be secured," Le Meridien said in a statement.
A spokesman for The Venetian said Le Meridien's troubles would have no effect on the Las Vegas resort. The alliance agreement was signed in February 2002 in a bid to shore up travel from Europe after the Sept. 11 terrorist attacks. At the time, Le Meridien had about 1,000 sales agents and had properties in New York, Los Angeles, Chicago, Boston, Dallas and New Orleans, but no presence in Las Vegas.
Royal Bank of Scotland Group Plc, owner of Grosvenor House and 10 other Le Meridien hotels, agreed to receive a payment of 4 million pounds ($6.65 million) to allow the hotel chain to delay 20 million pounds of rent, a Le Meridien spokesman said. Banks also agreed to lend an unspecified amount of working capital.
Le Meridien was bought in 2001 for 1.9 billion pounds by British financier Guy Hands, using equity from the four investors and loans from Merrill Lynch & Co., CIBC World Markets Inc., Lehman Brothers Holdings Inc. and other banks.
The Sunday Times reported that Saudi Prince Alwaleed bin Talal may invest in Le Meridien to help prevent the company's bankruptcy. The spokesman for the hotel operator declined to comment on the report.
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