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LONDON-Marylebone Warwick Balfour plans to expand its Malmaison Hotels and Hotel du Vin chains throughout the UK. The company has raised euro 151.8 million ($185.7 million) to fund a further nine hotels. The fundraising, through Royal Bank of Scotland and Bank of Scotland, is part of the company’s strategy of building its boutique hotel business to the point where it can consider a demerger or sale. MWB officials say that they had secured euro 43.4 million ($53.1 million) of new equity funding from RBS, while Bank of Scotland Corporate had underwritten euro 108.42 million ($132.62 million) of new debt funding, some of which would come from RBS.

The refinancing, on which Deutsche Bank advised MWB, will give RBS a 17.5% stake in the Malmaison Group. MWB executives say this implied an equity value of euro 245.8 million ($300.6 million) for the business and represents a euro 101.2-million ($123.8-million) surplus over book value.

Robert Cook, Malmaison’s chief executive, reports that MWB was a step closer to deciding the future of its boutique hotels. “Our preferred options are an IPO or trade sale,” he says. “A year down the line we’ll be in a position to make a decision.”

MWB, which also controls the Liberty department store in London, has eight Malmaison hotels and seven Hotel du Vin properties. The new funding will allow it to add at least another nine hotels over the next three to four years. MWB executives say that the strong performance seen by both brands in the second half of last year had continued this year and the business was “fast becoming a main driver within the overall MWB group.”

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