Deutsche Bank is sole Orchid backer

By Mark Wingett, M&C Report

- Last updated on GMT

Related tags: Finance

The refinancing of Orchid Group — the circa 300-strong managed pub operator — is understood to have been completed now, with Deutsche Bank’s real-estate arm becoming its sole backer through a debt-for-equity swap.

The move, which M&C Report flagged up last October, is thought to have seen Deutsche Bank write off a chunk of Orchid’s debt in return for taking sole control of the company from US private equity firm GI Partners and fellow lender Lloyds, both of which have now exited the business.

Deutsche Bank will continue to back the current management team led by Rufus Hall. It’s understood that it will provide funds to enable it to invest in its existing estate and in strategic bolt-on acquisitions.

The deal is seen as a positive one for the group, which will allow it to move forward under one owner with a balance sheet better suited to today’s operating environment. Last October, the group said it was set to breach
covenants on its debt, after reporting a pre-tax loss of £17.2m for the year to 1 January 2011 and writing down the value of its estate by £10.9m.

Its debt level stood at £42.2m. However, Orchid produces £38m at an annual EBITDA level.

The company, which went through a pre-pack administration at the end of 2008, forecast that it was to breach some of its existing covenants and “thereafter due to current trading patterns”.

Its brands include the Living Room, Ultimate Leisure and Bar Room Bar, plus individual pubs, restaurants, bars and clubs.

Related topics: MA Leaders Club

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