Scottish pub operator G1 Group has announced a new venture with troubled bar and hotel company Festival Group, which yesterday entered pre-pack administration, to run four of Festival’s Edinburgh venues.
The deal, for an undisclosed sum, has seen the formation of a new venture within G1 Group Holdings called EH1 Limited.
Kenny Waugh, who heads Festival Group, will become chairman of the new venture and also a director of G1 Group Holdings, which is headed by Stefan King.
The four sites in the EH1 venture are Biddy Mulligans, Grassmarket Hotel, Bank Hotel and the Murrayfield Hotel. A further ex-Festival site, the Three Sisters, has been placed within G1 Group Holdings.
One ex-Festival venue that’s not included in the new venture, the Raeburn House Hotel, continues to trade and is in the hands of Festival’s administrator KPMG.
Initial plans for EH1 include a capex programme worth more than £1m in 2012.
King said: “I’ve been keen to work with Kenny for some time and I am pleased to be able to join him in strengthening Edinburgh’s leisure market. No-one knows the city’s bars, hotels and clubs better than him and to have his in-depth knowledge and experience at Board level will be of enormous benefit.
“We are both very excited about the road ahead, and look forward to creating a company at the forefront of innovation and standards in Scotland.”
Festival Group is believed to have been looking to offload sites to pay its debts before it entered pre-pack administration yesterday evening. Its last accounts filed at Companies House show the group owed £46.2m to Clydesdale Bank at the end of July 2009.
Last week saw a management buyout of Festival’s chain of 65 bookmakers, Scotbet, for an undisclosed sum. That business had been on the market for 12 months.
