Meridien refinancing stalls

Millionaire financier Guy Hands, fresh from revelations of a personal loss of up to £50m in his investment in the Rockingham motor racing track, yesterday saw lenders to the debt-laden Meridien hotels chain unable to reach agreement on a refinancing. The banks are likely to extend the deadline, although insiders warn that the crisis may not be resolved for months.

Mr Hands led the takeover of Meridien in 2001, investing £213m on behalf of Nomura before he left to establish his own Terra Firma fund. Meridien's assets include the Waldorf and Grosvenor House, and profits and cash flow have been sapped by problems in the international hotels market. Nomura and the other equity investors - Abbey National, Royal Bank of Scotland and Alchemy Partners - have effectively written off their investments.

More than a dozen banks are exposed to Meridien's debts of £1bn but the three biggest lenders are Canadian bank CIBC and US groups Merrill Lynch and Lehman Brothers. The crisis was triggered when the company missed a £100m repayment in January. It has since paid that sum by selling three hotels but a further £100m becomes due in October.

Nomura will bear the pain at Meridien but Mr Hands used his own money to buy a 75% stake in Rockingham Motor Speedway, which built a 1.5 mile circuit on a former Northamptonshire steelworks. It failed to attract big crowds and Hands sold his shares for £1 to two directors of the complex.