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Forte buys time to solve cash flow crisis
Crisis talks between hotel tycoon Sir Rocco Forte and the Lloyds Banking Group have saved the Rocco Forte Collection from collapse, according to reports.
The bank has agreed to extend the terms a £300 million loan to Uberior - a subsidiary of Forte's RF Hotels - in return an increase in interest payments.
The holding company - a joint venture with Halifax Bank of Scotland (HBOS) - was said to have contravened lending agreements with the bank.
RF Hotels had not broken any financial covenant, though it was said to have received £100 million of the loan and was therefore deemed to be inextricably linked.
The deal has bought Forte time to solve the cash flow crisis that has blighted the company since the start of the recession.
Analysts blamed tight corporate travel budgets imposed on business travellers as the core reason for the company's demise.
The collapse of US investment bank Lehman Brothers, one of Forte's most lucrative clients, was known to have had a devastating effect on the business.
Bookings were expected to improve now that the UK has finally lifted itself out of recession.
Uberior has a portfolio of seven hotels, including the flagship Brown's Hotel in London.
Forte was believed to be holding separate talks with Italian bank UniCredito about an £80 million loan to finance the reopening of the company's golf and spa resort in Sicily
The Verdura resort was forced to close last year because of a lack of bookings.