G1 to run four Festival sites

Scottish pub operator G1 Group has announced a new venture with troubled bar and hotel company Festival Group, which entered into pre-pack administration, to run four of Festival's Edinburgh venues.

The deal, for an undisclosed sum, has seen the formation of a new venture within G1 Group Holdings called EH1.

Kenny Waugh, who heads Festival Group, will become chairman of the new venture and also a director of G1 Group Holdings, which is headed by Stefan King.

The four sites in the EH1 venture are Biddy Mulligans, Grassmarket Hotel, Bank Hotel and the Murrayfield Hotel. A further ex-Festival site, the Three Sisters, has been placed within G1 Group Holdings.

One ex-Festival venue that is not included in the new venture, the Raeburn House Hotel, in the city's Stockbridge area, is continuing to trade and is currently in the hands of Festival's administrator KPMG.

Initial EH1 plans include a capex programme, worth more than £1m, in 2012.

King said: "I have been keen to work with Kenny for some time and I am pleased to join him in strengthening Edinburgh's leisure market.

"No-one knows the city's bars, hotels and clubs better than he does.

"To have his in-depth knowledge and experience at board level will be of enormous benefit. We are both very excited about the road ahead, and we are looking forward to creating a company that is at the forefront of innovation and standards in Scotland."

Festival Group is believed to have been looking to off-load sites to pay its debts before it entered pre-pack administration last week.

Its last accounts filed at Companies House show the group owed £46.2m to Clydesdale Bank at the end of July 2009.

Last week saw a management buyout of Festival's chain of 65 bookmakers, Scotbet, for an undisclosed sum. That business had been on the market for 12 months.