The four-star hotel operator is reported to be in advanced talks with Grant Thornton, which is acting on behalf of the banks. The company is consulting its advisors on refinancing the debt after a breach of banking covenants.
Jarvis was taken private in December 2003, with a £229 million management buyout. The deal was backed by Lioncourt Capital and a consortium of Irish property investors, with debt funding from the Royal Bank of Scotland.
With a turnover of around £120m in 2008, the hotel group has been late in filing its accounts for 2009 at the Companies House. Its auditors, KPMG, stated there was "a material uncertainty which may cast doubt on the group's ability to continue as a going concern".
Jarvis Hotels, whose properties include the Royal Berkshire in Ascot and the Manchester Piccadilly, was founded by John Jarvis in 1990 with the purchase of 41 hotels from Allied-Lyons.
He floated the company with a market value of £300m in 1996. It raised £150m via a sale and leaseback of nine hotels in 2002. Since the buyout, Jarvis has sold 15 properties and is believed to be considering further asset sales to reduce its debt.
