RBS hit by £5m loans blow

By John Harrington, M&C Report

- Last updated on GMT

Related tags Bar group Royal bank of scotland Scotland

Blackpool Brannigans to be sold
Blackpool Brannigans to be sold
The Royal Bank of Scotland looks set to suffer a shortfall of more than £5m in respect of its loans to bar group Cougar Leisure.

The Royal Bank of Scotland (RBS) looks set to suffer a shortfall of more than £5m in respect of its loans to Cougar Leisure, the bar group that went into administration in January.

A report by administrator Begbies Traynor states that £6.8m was outstanding when its appointment was made and the current shortfall is valued at £5.1m, with none of the venues' leases sold to date.

Cougar was created in July 2008 from Herald Inns & Bars, in the wake of a pre-pack administration.

At the time it had 25 sites and RBS was owed £100m.

"The company initially traded profitably over a period of two years, and a number of sites were disposed of.

"This enabled the indebtedness due to the Bank of Scotland to be reduced," said Nigel Atkinson, of Begbies Traynor. "Disposals continued in 2010 and it was hoped that once all disposals were concluded, the company would be solvently wound up. By November 2010 there were six sites remaining and they were producing insufficient trading margin to cover overheads.

"The directors concluded that the company could not continue to trade outside of an insolvency procedure."

The administrator chose to cease trading at four bars because it was "very uncertain whether these sites could trade with a surplus once payment of rent is taken into account".

Christie+Co was brought in to market the venues, with the money raised, minus the cost of realisations, to be paid to RBS.

The report, filed on 8 March, says sales of two sites — Brannigans in Blackpool and Sprint in Manchester — were expected to be completed within three and six weeks respectively.

There's been "minimal interest" in Brannigans in Manchester and Mood in Newcastle. Two expressions of interest have been registered for the Boardwalk in Sheffield, together with a "handful of offers" for View in Manchester.

Related topics Professional Services & Utilities

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