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Enterprise Inns' solvency "not in question", says Tuppen

From The Publican

By Hamish Champ , 23-Jan-2009

Enterprise Inns boss Ted Tuppen has responded to growing concerns among his licensees that their rental deposits will be at risk if the company ran into financial difficulty.

Tuppen told "I think it's a reasonable question for someone to ask if people believe what they read in certain parts of the press.

"However our solvency is not in question," he added. Tuppen declined to answer the specific question regarding the security of any monies held as rental deposits.

The Enterprise boss argued the company was on a solid footing, despite the recent collapse in its share price and those of its peers, such as Punch Taverns.

"We have £6bn-worth of assets as against net debt of £3.6bn. Yes, our share price is low at the moment but you just have to look at our debt to asset ratio," he added.

Industry observers have expressed concerns about Enterprise's ability to reduce its existing loan facility of £1bn before it becomes due for renewal in May 2011, but Tuppen said the company "had a clear plan to reduce its debt", which included a raft of disposals.

Enterprise yesterday revealed net pub profits had fallen eight per cent in the 16 weeks to January 17, 2009 across its estate.

But Tuppen said the numbers were where the company had expected them to be.

"This is a very difficult market, not made any easier by the Chancellor's decision on beer duty.

"We're offering good levels of support to our licensees but we want to be clear on how we tailor it. These are difficult times, the consumer has been rocked by the banking crisis, and in any business not everyone makes it."

Responding to criticism that a recent valuation of Enterprise's pubs was unrealistic, Tuppen said: "We had our valuation carried out by Christie + Co and Humberts last September, a process that was reviewed by our auditors.

"I think the fact that we are selling pubs at around these valuations suggests we got it right," he added.

Enterprise announced yesterday it was in the process of selling 146 pubs for a combined consideration of £41m.

The pubco said it was putting a stop on acquisitions for the remainder of its financial year, as part of a drive to cut down its debt.

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