Blue Rainbow Apartments sold out of administration

George Sell George Sell Uploaded 29 September 2014

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UK: Manchester serviced apartment operator Blue Rainbow Apartments has been sold out of administration via a pre-pack arrangement, securing 39 jobs.

The company, which traded as Blue Rainbow Aparthotels, entered administration on 17 September.

City Space Hotels Limited made a bid for the business and assets of Blue Rainbow Apartments, which was was accepted by company directors prior to entering administration.

The company's main asset is the lease of 79 serviced apartments in a nine-storey building on Commercial Street in Manchester. Administrators Ben Woolrych and Russell Cash of FRP Advisory said that pre-paid deposits of around £200,000 would now be honoured in full.

Associated company Blue Rainbow Hotels (Edinburgh) Limited ceased trading on 16 September with the loss of eight jobs, and was placed into voluntary liquidation on 18 September.

Woolrych said: "The sale of the Manchester business and assets of Blue Rainbow Aparthotels has achieved the best result for all stakeholders especially the 39 employees, creditors and those customers who had made significant pre-payments for room hire over the remainder of 2014 which will now be fully honoured. Despite strong occupancy rates, a recent policy of discounting room rates to generate cash in order to support the turnaround of the Edinburgh business had led to operational losses for the Manchester business.

"These losses coupled with rises in other overheads led to severe cash-flow pressures and the subsequent sale process within administration. It was not possible to achieve a sale of the Aparthotel in Edinburgh prompting the closure of the business and eight job losses. The assets are being realised in the interests of creditors through the liquidation process," he added.

www.bluerainbowaparthotels.com

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