Ryan Hotels is to boost its balance sheet for further hotel expansion in city centre locations with a €22 million (£17 million) sale and leaseback of its Gresham Royal Marine Hotel in Dun Laoghaire, Dublin.

Ryan is selling the hotel to the Wexford builders and apartment developers, William Neville & Sons and other investors, and will lease the hotel back at an annual rent of €984,000 for the 2-1/2-year duration of the lease.

Ryan will use the sale proceeds to reduce its debt which stood at €87 million at the end of its January 2001 financial year. It will also reduce its bank gearing to 32 per cent and its gearing inclusive of lease obligations to 52 per cent.

Chief executive Mr Patrick Coyle said Ryan is targeting city centre locations in Britain and identified Edinburgh, Manchester and Birmingham as possible locations. The sale and leaseback deal has to be approved by shareholders.