Administrators at Ernst & Young have announced the sale of the business and assets of 240 hotels and pubs previously managed by London & Edinburgh Swallow Group (LESG) to Flodrive Group and “its joint venture partners”. The deal is subject to contract. Roy Bailey, one of the administrators, said: “We are delighted to have made early progress in salvaging a material part of the hotel and pub portfolio and securing the jobs of almost 2,500 employees.” LESG did not own any of the properties concerned. It is understood that the deal largely relates to the fixtures and fittings, plus the central support functions, of the 240 businesses. Flodrive, a property investor, has close connections with LESG. According to Property Week, Flodrive has bankrolled around 80% of LESG’s acquisitions to date. The relationship began in 2000 with the joint acquisition 43 pubs from Greene King for £7m. In 2003 a joint venture comprising Flodrive, LESG and the Pears Family Trust acquired 252 pubs from Punch Taverns for £57m. In August last year LESG, backed by Flodrive, acquired 21 properties from British Trust Hotels. Many of the properties acquired in these deals were then sold on to third parties at auction. The two companies also jointly own the Carnoustie hotel and golf resort in Scotland. Flodrive is owned by the Khalastchi family, which is estimated to be worth almost £100m according to The Sunday Times Rich List. In the year to 2005 it made a profit of £13m on turnover of £65m. The deal still leaves more than 400 sites – a mix of pubs and hotels – with administrators.