SFI: 'sale of Slug will not solve the problem'

SFI executive chairman Stuart Lawson has told The Publican the troubled group will not sell Slug & Lettuce.

Avanti Capital, the private equity group that bought Po Na Na out of administration, had approached SFI's banks to buy the high street brand.

He said: "Selling part of this group will not solve the problem. Avanti did approach our banks and like they have done in the past, the banks referred them to me."

Mr Lawson confirmed that he had personally met with the owners of Po Na Na on January 7 when he made the group's position clear.

The SFI boss, who replaced Andrew Latham last year, has been putting together a strategy that will see SFI emerge from a near fatal cash crisis.

He said: "We are very close to having a recommendable solution for shareholders which does not involve selling any part of the business.

"It has taken a long time because of the myriad of complex issues that unfortunately surround this business."

Avanti wanted to pair up Slug & Lettuce with Po Na Na-operator Barvest and was prepared to make an offer for the whole company. But its offer would have amounted to a fraction of SFI's £155m debt mountain.

It was thought that the banks might consider cutting losses. Mr Lawson said: "If they [the banks] were going to do something prohibitive, they would have done it a while ago."

A financial review of SFI in 2002 uncovered a £20m black hole that led to the suspension of its shares and eventual delisting.

In December the Financial Services Authority, the stock market watchdog, publicly censured the group for breaching UK listing rules and presenting an "overstated and over-optimistic view of the company's finances.

Shortly before the company ran into trouble the then chairman Tony Hill had told investors "all key performance indicators were positive".