Royal Bank of Scotland (RBS) has appointed Ernst & Young as receivers to a £1 bn (EUR 1.13 bn) property portfolio of Marriott hotels, an E&Y spokesperson confirmed to PropertyEU on Wednesday.

RBS took control of the portfolio, consisting of 42 four and five-star hotels, after failing to secure a debt-for-equity restructuring deal with the owners. The lender is likely to put the portfolio back on the market as soon as possible.

The portfolio, offering about 8,000 rooms across the UK, was acquired for £1.1 bn from the bank in 2007 by Igal Ahouvi, Quinlan Private and Delek Real Estate. The assets are operated by Marriott International under a 30-year management agreement that commenced in 2006.

According to a report in the Financial Times, RBS lent about £700 mln of debt to finance the acquisition, while an additional loan was originally provided by Lehman Brothers and subsequently acquired by hedge fund group York Capital.

Alan Bloom and Roy Bailey of Ernst & Young have been appointed joint administrative receivers over the offshore holding company called Professional Ventures Corporation, headquartered on the British Virgin Islands. 'It is business as usual for the portfolio. Marriott will continue to operate the hotels and this decision will not affect customers, suppliers or employees of the hotels,' Bailey said in a statement.