Financial management services
The client
The board of directors of a Luxembourg joint venture entity in which a US-based private equity fund holds 90% of the equity and a UK private company holds 10%.
Background
A portfolio of seven hotels in the UK was acquired in 2006 from Hilton Group plc and managed under management contract to the joint venture. The hotels were sold with the benefit of a short-term licence agreement with Livingwell Health Clubs and Hilton but, after a few months, were rebranded to Holiday Inn (5) and traded unbranded (2) with the six health clubs rebranded.
Consultant: Ian Graham
Project objective
To provide financial management services to the new business, enabling the businesses to be acquired, traded and rebranded, whilst also ensuring that all debt service and other corporate governance issues were addressed.
Project scope
The Hotel Solutions Partnership consultant worked with the management company and the joint venture equity partners to ensure that the business was equipped with all the necessary financial and other management tools and resources required enabling the several phases of transition.
Methodology
The internal teams at Hilton, at the management company and at the hotels were coached to ensure all aspects of process, technology and organisation were appraised, enhanced or added to throughout an initial six-month assignment, which was extended by a further two 3-month terms.
Results
- Early adoption of international accounting standards
- On-time settlement of working capital balances with Hilton Group plc
- On-time reporting to UK and Luxembourg fiscal authorities
- On-time reporting to the US private equity fund
- Compliance with debt service obligations
- Compliance with VAT reporting
- Compliance with requirements of the joint venture agreement
- No material audit concerns from PricewaterhouseCoopers
- Phased transfer of roles to newly-hired staff members in the UK and Luxembourg
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Associated Experts
Ian Graham: leads and contributes to complex advisory assignments for hotel owners and operators around the world, leveraging his deep understanding of the goals of the guest, the hotelier, the investor, the lender and the brand owner - and all this from a unique base of experience that has seen him working on hotel issues in more than 60 countries
Read more >Associated Areas of Expertise
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