The AIM-listed pub group, Pubs 'n' Bars, has been placed into administration after its lenders, including Allied Irish Bank, refused to continue supporting it.
The group called in administrators at Grant Thornton after experiencing weakened trading due to a combination of factors. Thes included the downturn in consumer spending, credit insurers reducing cover for suppliers, the smoking ban, and a decrease in income from machines on the sites.
Managers run two-thirds of the 87 pubs, which are based mainly in the South East, with the rest operated by tenants.
The administrators are looking at the financial situation of Pubs 'n' Bars, and of the individual pubs while they continue to trade. Joint administrator David Thurgood said: "However, it is clear that some of the weaker units may need to be closed to conserve cash in the business."
Pubs 'n' Bars had been issuing regular profit warnings for some months, and admitted that its banks were supporting the business on a daily basis.
The group put its division, Moorgate Taverns, comprised of ten freehold pubs, into administration in September after it had been operating at a loss, and had breached some of its borrowing covenants with its bank Clydesdale. Moorgate's move into administration was to protect the parent firm. Pubs 'n' Bars debt stood at £7.08m at December 31, 2008.
Pubs 'n' Bars current level of debt stands at about £24m, and for the year to 31 June 2009 its loss was recorded as £691,000.
