Â£15m loan altered as hotel owners change
The ownership of the new Hilton hotel at the landmark Fletton Quays development has changed hands, causing an alteration to a Â£15 million loan from Peterborough City Council for the project.
The authority a year ago agreed the loan for Norlin Hotels Holdings Limited to accelerate the building of the 160 bed Hilton Garden Inn on the South Bank development.
Under the terms of the deal the council would borrow money at a “very competitive” interest rate before lending it to Norlin which would pay a higher rate of interest back to the council at the end of the two year period. This would make the council a profit.
The loan was to be secured against the land and the building and would never exceed the value of the site.
However, a new council report has revealed that the ownership of Fletton Quays Hotel Ltd has now switched hands to Propiteer Hotels Ltd.
It states: “Propiteer Group and Norlin Group have previously collaborated as investment partners on a number of projects spanning several sectors.
“The decision was taken to separate their interests due to a difference in investment strategy: Propiteer Group wished to focus solely on property transactions and ownership, and thus retained the residential and commercial property portfolio, whilst Norlin Group retained the retail side of the business.”
The alteration of the agreement will see the loan paid out over 48 months from the time the council makes the first payment to Propiteer, instead of from September 2017 as previously agreed with Norlin.
The report says that the council’s financial advisers have raised no areas of concern. It adds: “A Hilton Garden Inn will be delivered on the Fletton Quays site and the change of ownership will not affect this.”