Admiral Taverns Landesberg and Rosenberg families step down as Lloyds Bank takes equity stake
Lloyds Banking Group takes an equity stake in the company with existing management taking a stake.
The deal, which came in the form of a pre-pack administration, comes after it fell behind on repayments of more than £1b in debts.
PriceWaterhouseCoopers (PwC) partner David Chubb told the Morning Advertiser: "The former shareholders have seen their equity value disappear. Gary Landesberg is very busy with a number of other things anyway."
Under control of the Landesberg and Rosenberg families and with loans from the Bank of Scotland, Admiral made a string of acquisitions of around 3,200 bottom-end pub estates from the likes of Punch Taverns, Enterprise Inns and Greene King, transforming it into the UK's third-largest leased and tenanted pub operator.
The company forecast a 7% drop in beer volumes before the start of the smoking ban but has been hit by far larger drops than that.
Under a debt-for-equity swap, Lloyds is expected to take a stake of just under 50% in return for writing off some of the debt.
Lloyds does not want to take a majority stake in Admiral to avoid having to consolidate the pub group's accounts into its own, according to the Financial Times.
Admiral raised around £100m last year through pub sales — it is thought pubs were selling for around an average of £330,000.
Sources indicate that pub sale values have dived this year to below an average of £200,000.
Admiral Taverns turnaround division
The company is divided into three divisions — core, turnaround and disposal.
The turnaround division, which is run by Peter Brook, is thought to have seen barrelage halve over three years from around 150 barrels to 75 barrels, although that figure is thought to include closed pubs.
Admiral was spending an annualised total of £5m a year on the cost of closed pubs earlier this year.
Accountant PricewaterhouseCoopers had been working on behalf of Lloyds Banking Group, which inherited the Admiral loans in the wake of its takeover of HBOS, and was seeking a new equity investor in the business.
One source said: "There is a decent core business of at least 1,000 pubs. One problem is that beer volumes have been in freefall and the alternative use market seems to be a lot weaker this year than last year."
It is thought that Admiral produces an annualised EBITDA of just over £50m a year. making it worth around £400 to £500m at best.
