Vultures circle for Stonegate pubs: Vulture funds are circling a portfolio of 1,000 British pubs as the country’s biggest operator grapples with the fallout from soaring interest rates on a multi-billion-pound debt pile. The Sunday Times writes that Cerberus (the former backer of Admiral Taverns) and Morgan Stanley Real Estate are among a clutch of distressed-debt investors to have submitted bids for almost a quarter of the pub estate owned by Stonegate, say City sources. Stonegate is looking to spin off unencumbered pubs into a new special-purpose vehicle (SPV) and raise new debt to help pay down nearly £4bn of borrowings — half of which is due to be repaid or refinanced by July 2025. Any refinancing is likely to be at a higher rate of interest, placing pressure on the company’s finances. Fortress Investments, the owner of Punch Pubs, and hedge funds Oaktree Capital Management (the current backer of RedCat Pub Company), Sculptor Capital Management and Avenue Capital are understood to have run a rule over the pub portfolio. Formed in 2010, Stonegate is the UK’s biggest pub operator with more than 4,500 sites, most of which are unbranded. Its branded sites include Popworld, Slug & Lettuce and Be At One. Bids to provide debt financing to the SPV were submitted a fortnight ago. Sources said that Stonegate’s advisors, Barclays and Eastdil, are looking to take one of the parties forward into exclusivity in the coming days. Stonegate is thought to be seeking to raise about £600m. However, the debt could yet be shelved if bids are not deemed attractive, sources added. All parties declined to comment.

King to invest up to £8m on The Park restaurant, to rename Le Caprice as Arlington: Jeremy King, the co-founder of Corbin & King who confirmed earlier this summer he is to make a return to the capital’s dining scene, will invest up to £8m on opening his The Park site with in Bayswater, and reopen the former Le Caprice restaurant in London’s West End under the new name Arlington. The bill for refitting Le Caprice will be “considerably higher” than the £30,000 he spent on its 1982 refurbishment, King told the Mail on Sunday. It will be followed by an investment of up to £8m in a New York-inspired ‘Grand Cafe’ called The Park, which is set to open next spring in the new Park Modern building in Bayswater. Then, King is raising roughly the same sum again to open a third central London restaurant. Rumours that he plans to base it in the former NatWest bank opposite The Wolseley are incorrect, he said, but its location is still under wraps. He said: “It’s a big restaurant. I’m constrained. So I can’t say where it is.” All three projects are part of his new business group called Jeremy King Restaurants. It is King’s third act in hospitality after selling Caprice Holdings to entrepreneur Luke Johnson in 1998 and losing the Corbin & King business – owner of The Wolseley and seven other restaurants – to Thai hotel group Minor International last April. Minor used its controlling stake to tip the group into administration and then seized control by beating a bid from Corbin & King. Perhaps to prevent similar upsets at his three new restaurants, each will be financed by a ‘club’ of up to 20 smaller investors, and King’s group will retain a substantial stake. He plans to raise most of the required funds from family offices and individuals. “If I know them, I am interested in talking,” he said. “A lot of them [the investors] are friends. It would be wrong for me to name them yet.” King admits he was initially apprehensive about taking over Le Caprice again. “I’ll be candid,” he said. “I thought, it’s one thing to return. But would it be interpreted as a backward step?” So, there will be a sign he is moving things on when it reopens in the New Year. Since Caring has trademarked ‘Le Caprice’, King reveals the restaurant will be renamed ‘Arlington’, after its address in Arlington Street since 1947. Jeremy King, the co-founder of Corbin & King and doyenne of London’s dining scene, will be among the speakers at the final Propel Multi-Club Conference of 2023. The conference takes place on Thursday, 16 November, at the Millennium Gloucester Hotel in London’s Kensington, and is open for bookings. The all-day conference will focus on “progress in an era of strong headwinds”. King will talk to Propel group editor Mark Wingett about making his return to the sector, what he plans to do differently, and where he sees the restaurant market in the capital going. For the full speaker schedule, click here. Operators can book up to three free places per company by emailing kai.kirkman@propelinfo.com.

Leonardo Hotels sees losses rise to almost £60m despite turnover nearly doubling: Leonardo Hotels saw its losses hit almost £60m in the face of rising costs despite its turnover nearly doubling to £290m for the year ending 31 December 2022. The company, which rebranded its Jurys Inn hotels towards the end of the period, posted a pre-tax loss of £58,079,000, up from £52,335,000 the previous year. Turnover increased to £290,287,000 from £149,290,000 the year before. In their report accompanying the accounts, the directors stated: “The large increase in turnover versus prior year represents the huge rebound in business on the back of the covid pandemic in the two previous years as customers began to travel and stay away from home once again. While there still remained challenges in the first quarter of 2022 regarding covid, the company ensured that confidence was built with customers. which allowed for a successful year in terms of both rates achieved and occupancy levels as the market recovered. While turnover has increased dramatically, operating costs increased substantially as inflation reached record high levels and the impact of the war in Ukraine led to energy costs rising. While the market continues to grow and as a company one new hotel was opened during the year in Manchester, cost control is a key focus in order to manage cash flow in the face of increasing costs. There is an active pipeline of potential new hotel operations throughout 2023 and beyond as the company views new cities and sites.” Leonardo Hotel Management (UK) is owned by Fattal Hotels, which has put the freehold of its Newcastle hotel on the market for £31.8m. The business, which operates 52 hotels in the UK and Ireland, was founded by David Fattal who built a fortune of around $1.3bn after setting up his hotel chain in 1998. Fattal Hotels is the largest chain in his native Israel.