The sale of the final chunk of De Vere Group will be completed on Wednesday when an American private equity group seals the deal for the purchase of its mid-market Village hotels chain for £485m.

KSL Capital Partners takes possession of a portfolio of 25 properties comprising 3,100 rooms, plus three more under construction in Aberdeen, Edinburgh and Glasgow.

At the same time, KSL is considering the sale of its Malmaison Group of 29 Malmaison and Hotel du Vin properties, only 18 months after buying it for around £200m.

KSL invested in the Malmaison group under its chief executive Gary Davis, who is now off to run the Village chain.

The Denver-based private equity group bought Cannizaro House in southwest London for around £20m, and opened a Malmaison in Dundee. But it has asked UBS to examine strategic options.

It won a hotly contested race for the Village chain, which began in the summer when De Vere put it on the market with an initial price tag of £450m.

The auction attracted 18 bids and came down to a three-way fight between KSL, rival US equity group KKR and Hong Kong-based Great Eagle.

The proceeds of the sale go towards debt repayments borne by Lloyds Bank, which inherited De Vere four years ago as part of the bank’s acquisition of HBOS. Those debts totalled £1.75bn.

De Vere was saved from collapse after Lloyds wrote off £650m of the bad loans held in HBOS’s hospitality assets by converting debt into ordinary shares.

Another £232m came from the sale last year of Venues, De Vere’s conference business. Hotel and golf resort disposals, including the Grand Hotel in Brighton and Cameron House on the banks of Loch Lomond raised a further £300m.

The De Vere disposal programme has now ended, bringing the total raised to more than £1bn.

Andrew Coppel, De Vere’s chief executive, said the disposals were achieved because of a strategy of building value in its assets to a point where they could be sold at premium prices.

“To generate over £1bn of sale proceeds in challenging market conditions reflects well on the team. It represents a vindication of our strategy and Lloyds Bank’s confidence in the company,” he said.

He added that KSL was prepared to invest substantially in the Village portfolio and pipeline.

Mr Davis previously worked at De Vere before Mr Coppel took over.

KSL and Malmaison declined to comment.

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