A prominent seaside hotel has been sold out of administration after racking up debts of nearly £2m.
The Sea Hotel in South Shields had been put up for sale with a £1.65m price tag last year following the business' collapse in the summer of 2022. Since then, the venue, which had been owned by The One Collection Leisure Ltd - previously part of the failed Newcastle-based High Street Group of companies - has been traded by administrators at RSM who say losses of £117,000 are likely to have been incurred since their appointment.
Now, the venue has been sold for an as yet undisclosed sum to Yorkshire-based Resource Medical (UK) Limited, which runs a number of hotels and a pharmacy business. The firm has plans to invest and continue running the 34-bedroom hotel, which includes a restaurant, bar and self-contained function room, and underwent a £750,000 upgrade in 2018.
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RSM said a "small number" of redundancies among the hotel's 95-strong team had been necessary to reduce costs. And a core team of staff had been retained to keep the venue running as real estate specialists Colliers were brought in to market it to prospective buyers.
During the nine months of trading, administrators aid the majority of bookings and events had been honoured. RSM had secured £75,000 funding from Fresh Thinking Partners to aid the running of the hotel, which will be repaid as part of the administration.
Lee Lockwood, partner at RSM UK and joint administrator, said: "It has been a complex nine months facilitating the sale of the Sea Hotel and I am pleased we have been able to agree a sale with the new owner which has secured the majority of future bookings. I would like to thank all staff and guests for their continued support and understanding during a challenging time. Given its significance as a historic building, I hope that this sale will ensure tourism continues in the area and supports the local economy for years to come."
RSM was called in by lender Assetz Capital Trust in July 2022, and subsequent investigations have found that it had incurred losses of £123,000 in the first half 2022, having also been loss making the year before. A report from last year shows the hotel business owed nearly £2m at the time administrators were called in, including sums to Assetz, HMRC and North East suppliers.
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