Shareholders face wipeout after Regent Inns goes into pre-pack

Published 21st Oct 2009

Regent Inns, the operator of the Walkabout bar and Jongleurs comedy club chains, is to undergo a pre-pack administration that will wipe out ordinary shareholders and precipitate the closure of nine of its worst-performing sites, with the loss of 150 jobs.

The appointment of BDO as administrator to the group, which was delisted from the Stock Exchange in June, will also see the leases on 12 Old Orleans outlets revert to Punch Taverns, the embattled pub group from which Regent bought the restaurant chain three years ago for £26 million.

There had been fears that the Old Orleans sites would be forced to close, but last night BDO agreed an eleventh-hour deal with Punch that will allow the outlets to continue trading under the present brand, preserving 254 jobs.

The less fortunate venues include the five Jongleurs clubs in Southampton, Nottingham, Bristol, Oxford and Bow, East London. Three Walkabout bars will also close, including one in Shaftesbury Avenue, in the West End of London. Despite its high-profile location, the bar could not support an annual rent of £950,000.

The pre-pack administration comes after the failure of attempts by John Leslie, Regent’s chief executive, to persuade the landlords of some of the group’s most onerous leases to renegotiate terms.

The slimmed-down Regent, which will have 60 outlets and 1,800 staff, will be controlled by the banks under a debt-for-equity swap. Its banks — Royal Bank of Scotland, Barclays, Lloyds and WestLB — are believed to be writing off more than 40 per cent of the group’s £80 million debt burden in return for majority control.

The refinancing is being structured as a management buyout led by Mr Leslie, through Intertain Limited, a new company. Mike Dowell, a former managing director of Costa coffee and Pitcher & Piano, has joined the team as strategy and business development director. A new chairman will also be appointed.

Ordinary shareholders, including Brook Leisure, which has a 20 per cent stake, will be left with nothing. Trade creditors are also expected to be left significantly out of pocket.

Source: ' Times '

View All Latest News