All eyes are on the sale of beleaguered SFI
Slug & Lettuce operator SFI Group has been put up for sale, the Morning Advertiser has learnt. The company has set a deadline of mid-March for first-round bids. News of the decision to sell the group comes after its lendors appointed Kroll Corporate Finance to report on its options. A threeyear recovery plan for SFI Group, due to be completed in May 2006, has stalled after changes in ownership. The decision to look at selling SFI comes after six debt traders bought the debt of two of its banks. There have been rumours that bank debt has been sold in the group for as little as 70% of its face value.
Executive chairman Stuart Lawson told the MA last month that around £10m is needed to finish a refurbishment programme. He also admitted that the SFI would need an extra year beyond May 2006 to hit a forecast earnings level of £17m it made £8.3m last year.
One source said: "It's difficult to get to grips with the legacy issues at SFI. Another problem is going back to banks to ask for finance given their experience here. If I was an SFI banker I'd be happy just to get my money back."
Estimates of SFI's value range between £70m and £100m. But some observers believe the company has many sites that have excessive rent levels and need serious investment, factors that could make even the lower end valuation optimistic.
Another source told the MA: "There's a Bar Med in Reading that was one of the company's best sites with a £1m profit per year it's losing money now."
The most valuable part of SFI Group is its 57-strong Slug & Lettuce chain, where like-for-like sales have been up 6%.
"Stuart Lawson has done a good job at SFI since he arrived and a management buyout with private equity backing could well be the end result of this," said one industry observer.
