The holding company for the portfolio of hotels collapsed under the weight of about 900 million pounds of debt, most of it held by Royal Bank of Scotland (RBS).

Blue Mountain Real Estate Advisors, a part of the Mumbai-based India Blue Mountain group, is understood to have been granted a period of exclusivity by RBS to put together funding for a deal, The Times said in a report.

The proposed sale to Blue Mountain comes as a surprise as, according to the report, the front-runners in the latter stages of the auction had been RB Capital and Sahara, the Indian group that bought the Grosvenor House on Park Lane just over a year ago for 470 million pounds.