In a statement released this afternoon, MWB Group Holdings, announced it had made the decision to enter administration following unsuccessful attempts to reach a resolution to an issue relating to debts owed to its subsidiary company - serviced offices business MWB Business Exchange.
The problem resulted in MWB Group Holdings delaying the publication of its financial results and instead suspending its shares from trading on the London Stock Exchange at the end of October.
The company explained MWB Malmaison Holdings and its subsidiaries, which directly operate 15 Hotel du Vin venues and 12 Malmaison hotels, were not in administration and continued to trade as normal. A position reiterated by a separate statement made later by Gary Davis, Malmaison and Hotel du Vin chief executive.
However as sole shareholder of the hotels business, MWB Group Holdings entering into administration affects the ownership of both Malmaison and Hotel du Vin and could lead to the sale of the properties.
The statement from MWB Group Holdings explained it has resolved to: "Appoint administrators with immediate effect and has filed notice of intention to appoint two insolvency practitioners at Deloitte LLP as joint administrators to the company."
Referring to the share suspension announcement, the statement continued: "Despite ongoing dialogue, there has not been a satisfactory resolution to the issues set out in the announcement and the uncertainty over potential cash receipts remains.
"Consequently, and in the absence of any other available facilities to the company from its existing lenders or elsewhere, the company is, or will shortly be, unable to meet its liabilities as they fall due and the board of the company has therefore concluded that, in such circumstances, the appointment of administrators is the most appropriate course of action."
Responding to the development, Malmasion and Hotel du Vin hotels said it had no bearing on the operations of the hotels which were performing 'strongly' under a new management team.
Davis said: "We have a talented team who provide consistently high standards of service, as demonstrated by the excellent customer feedback we receive. Both businesses have performed well this year and we continue to see improvements in trading.
"Occupancy continues to improve with resilient room rates and recent management initiatives continue to deliver growth and margin improvements. We look forward to the exciting Christmas season and a successful 2013."
Davis also revealed the forthcoming Dundee Malmaison opening was on track for July 2013 and the company was identifying other ways to invest in and enhance the estate.
The latest issue for the hotels' parent company has arisen as a result of a failure by MWB Group Holdings to repay an £8m debt to subsidiary MWB Business Exchange.
Discussions were also taking place between the two companies in regards to contractual payments of £4.8m that MWB Business Exchange is due to make to MWB Holdings by February next year.
It had been thought that an agreement could be made to offset one debt against the other, however that agreement appears not to have been reached.