Food & Drink Group goes into administration
The credit crunch has claimed another victim in the form of Food & Drink Group (FDG), which went into administration yesterday.
Mainpaint, a company backed by NGBI Private Equity (NGBI PE) has acquired a portfolio of 17 branded and unbranded managed sites with a geographic focus on London from administrators BDO Stoy hayward, along with 17 franchise sites under the Henry J Beans brand.
While the consideration for the sale was not revealed FDG said it was not expecting to return any funds to shareholders as a result of the disposal.
In a statement FDG said: "The group has been facing the most challenging economic conditions for decades which has reduced operational performance and has restricted investment in the group's brands.
"These conditions have prevented the group raising the further financing it needed. The sale of the business has secured the jobs of 300 of the group's employees."
NBGI PE is backing Nick Tamblyn, who joins the new-look operation in a full-time role as chief executive. Tamblyn developed the Tiger Tiger bar concept - as well as other West End bars including On Anon, Digress and The Langley - while chief executive of Chorion, the predecessor of Urbium. Nick Gibbons of NBGI PE will also be joining the board of the new business.
NBGI PE said in a statement that the Jamies and Henry J Beans brands "have a good level of consumer awareness in the South East market".
"NBGI PE sees substantial opportunity to drive improvements to customer service and operations, and refresh branding across the portfolio. The acquisition also provides a strong platform from which to seek further high quality acquisitions in this sector," it added.
FDG's troubles began as the credit crucnh started to bite. Its shares were suspended in June after collapsing more than 45 per cent to 10p.
At the time the group hoped that talks with a potential buyer would result in a deal to suit shareholders, but the challenging market meant this could not be achieved.
FDG's problems were exacerbated by its exposure to the City of London, where thousands of white collar jobs have been lost in the past year, due to the downturn in the financial services sector.
Shay Bannon, joint administrator at BDO said: "A reduction in the amount of disposable income as a result of the current economic climate has played a role in the group's difficulties.
"Securing a going concern sale of the business, which will protect 300 jobs, is positive news for the employees and the industry as a whole."
