A Manchester-based property firm dealing in luxury serviced apartments has been sold out of administration via a pre-pack arrangement, securing 39 jobs.
Blue Rainbow Apartments Limited, trading as Blue Rainbow Aparthotels, entered administration on 17 September.
A bid from City Space Hotels Limited for the business and assets of Blue Rainbow Apartments, primarily a the lease of 79 luxury serviced apartments in a five star, nine floor building in Manchester, was accepted by company directors prior to entering administration.
Administrators confirmed that pre-paid deposits, amounting to approximately £200,000, for the apartments would now be honoured in full.
Associated company Blue Rainbow Hotels (Edinburgh) Limited ceased trading on 16 September with the loss of 8 jobs, and was placed into voluntary liquidation on 18 September following a failed turnaround plan.
Ben Woolrych and Russell Cash of FRP Advisory were appointed as joint administrators to the company.
Woolrych, partner at FRP Advisory, 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.”