McKever loses £30m of own cash in hotel group collapse

Published on Thursday 25 June 2009 21:54

THE entrepreneur behind the collapsed McKever hotel group is set to lose up to £30 million of his personal fortune, after lending his own cash to the firm.

Alistair McKever pumped his own money into the company, which was forced to call in administrators after failing to keep up banking and tax payments.

The group, which owns about 20 hotels and guest houses, mainly in Scotland, called in administrators BDO Stoy Hayward earlier this week, with debts of 70m – owed to both McKever himself and HM Revenues and Customs.

A total of 450 jobs are at risk, although administrator James Stephen yesterday said it was "business as usual" and he hoped to sell off the group.

McKever yesterday revealed that his company had struggled since the credit crunch restricted bank lending. He had "significant" loans with Anglo Irish Bank, the Dunfermline Building Society and HBOS.

He explained: "My business model has always been to buy up a property which is very poor, and throw money and management at it. Then I would remortgage, based on the new value of the property, to work on the next project."

McKever insisted all the 20 separate hotel businesses within the group were running profitably – but the problems had come when he tried to borrow more money last year.

He continued: "I bought up another site and knocked down the building there ready to build a new property. Then when I went to borrow some more money, the lending just wasn't there any more.

"Debts started to accumulate, especially a disputed bill with HM Revenue and Customs. One bank called up the debt followed by the others."

He added: "I have lost everything. I have been putting my own personal money into the business for some time now to keep it afloat. In the 27 years I have been in business, I would not have seen a credit crunch like this coming."

The business, which includes the Glasgow City Hotel and the Banff Springs Hotel in Banff, has in recent years expanded into four blocks of flats used for homeless people – sparking controversy with local residents.

Campaigners this month argued that the people housed in the blocks in Glasgow were not given proper support, leading to anti-social behaviour.

James Stephen, business restructuring partner at BDO Stoy Hayward said: "All hotels are continuing to trade and will remain open while we conduct a review of the business with a view to securing a going-concern sale of the group."

The administrator has appointed BDL Management to manage the daily operation of sites belonging to the group.

McKever is still a shareholder in leisure group Dark Star.