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Admiral Taverns in debt-for-equity swap and pre-pack deal
17 November, 2009
Dramatic move sees end to Landesberg/Rosenburg connection with pub trade
Admiral Taverns has undergone a debt for equity swap and pre-pack administration arrangement which sees Lloyds Banking Group, the pubco’s lender, now owning a significant stake in the business.
The anticipated deal, steered through by administrators at PricewaterhouseCoopers, marks an end to the involvement in the pub game of the Rosenberg and Landesberg families, who established Admiral in 2003 by buying tail end pubs from large operators including Enterprise Inns, Punch Taverns and Greene King.
While Lloyds is understood to have written down up to £600m on its investment in Admiral, its holding in the pubco is believed to be less than 50 per cent, largely to avoid having to bring its accounts into the bank's. Lloyds declined to comment on its stake, but said it had already accounted for any writedown which would occur.
A spokesman would not say how the long Lloyds - which is effectively publicly owned after the recent government bail out of the banking sector - would hang onto its holding in Admiral.
Meanwhile the pubco’s executive management, including chief operating officer Lynne D’Arcy, also have a stake, although the scale of this holding has not been declared.
Admiral’s demise was the result of crippling interest payments on its near £1bn debt.
Sources suggested that following the “dramatic” reduction in both debt and interest liabilities the new group could and would trade profitably.
The companies that have gone into the pre-pack administration included the group leading entities, Admiral Taverns Group Limited and Admiral Taverns Holdings Limited, as well as two other holding companies.
It was being stressed by sources close to the deal that the pre-pack would not result in either job losses or suppliers going unpaid.
The move would make “no difference” to Admiral Taverns’ tenants, who would continue to trade and pay rent and beer bills in the normal way.
In a statement Admiral said: “This move marks an end to recent speculation about Admiral Taverns’ future and places the group on a firm financial footing.
“There will be no impact on the day-to-day operations of the Group, business will continue as usual and the current management team will remain in position.
“Our main concern throughout these negotiations has been to minimise disruption to our staff, partners and suppliers and we are happy to say we have achieved this.
“Landlords, tenants, suppliers and contractors should also be unaffected and will continue to do business with us as they have previously.”
Readers' comments
Admiral taverns A failed business model to be bailed out by a bailed out bank What went wrong? A property development tycoon sees an opportunity to buy cheap real estate in the form of badly performing pubs from pub companies which had the same business model which admiral wanted to follow. Having a tied estate with over priced rent, over priced product, unfavourable trading terms and a reluctance to assist tenants in an ever decreasing and troubled market in a dire economic climate. Admiral have proven to be inflexible and unapproachable they seem to have missed the point of a public house being a people business run by real people serving real people who are not just numbers to pushed around on a balance sheet.. As Admiral are supposed to be partners in the business they should try to work with their leaseholders not against them by continually fining people who are obviously already finding it difficult to make ends meet they like the banks are compounding the problem . This may be why the bailed out banks like them as they both employ the same tactic of kicking people while they are down by charging people for overdrawing with an unjustifiable and seemingly excessive charge. So why do the two big boys who have been bailed out with public money not try to assist the people who have actually helped them. They should get off their high horses and smell the coffee talk to the real people try to help your customers/lease holders instead of compounding their problems and making their lives a misery. You could not pay your debts and were saved by the people you are now making bankrupt.
With the news of a admiral near collapse what is the possability of the banks /administrators asset stripping and having a fire sale with poorly trading properties as a leasee I would not like a surprize of a new owner .Would the new owners approch sitting tenents with first refusal offers. any advise would be greatfully accepted.
a change of middle managment would boost this company. Too many deadwood people with no drive
This seems to be a terrible deal for the tax payer. Why have they not insited on Admiral selling their properties to get more of their money back. Or in fact is that what will now happen. Also they made a mistake not to be sacking Admirals staff as they are now proven to be failures and they could save some money there as well.
Lloyds have taken up 49% of the equity which is worth nothing. As a taxpayer should we have allowed this? As a secured creditor they may have got something back but as an ordinary shareholder they have thrown everthing away.
Hang fire! There will soon be some seriously cheap pubs being offered in the fire sales - in an already saturated market place. More pubs for sale, virtually no demand, scarcity of funds.. We will soon be seeing yet more closed outlets and the few that sell attract bids around 100K! Time to convert to flats and let to housing benefit tenants, until the local authorities run out of money and become bankcrupt themselves - just a matter of time of course.
It doesnt surprise me that Admiral are in that much debt! Before they sold our pub from under us (after doing nothing to it since they bought it from Punch Taverns!!!) they did not want to listen to the problems we had with the place!
Another pubco about to bite the dust. They are all now teetering on the edge, just one little push and over they will all go... Just waiting for our resident advisors with a vested interest, to absurdly defend the pubco model and tell us there is nothing wrong with it. This is of course just the beginning of the end for the pubcos and many associated businesses.
I'm just about to re-new my 3 year tenantacy agreement, should I wait??already lost money with pennant inns demise.any ideas?
interesting news, would be nice if admiral could let there tenanats know what is happening and where they stand !!!!!!!
In response to D Smithers comments: So far as the leases are concerned nothing will change. Because the company only went into administration it remains the same legal entity. Only the shareholders have changed. The leases are still therefore valid. Bruce Faulkner
OMG a semi-nationalised part-owned pubco. That is scary and we should all remember that banks are asset strippers. With our cash paying for this bank that's even worse. Michael
If a tied leaseholder has a lease with Admiral, then surely this is no longer valid, so a new lease should be drawn up? There is also the matter of the unworkable beer tie, clearly it doesn't work as the company has gone tit's up, so maybe buying beer from a more competitive source will help Admiral leaseholders to survive this turmoil caused by extremelly poor management ? D Smithers