Debt burden prompts Walkabout deal

Reducing the group's debt burden lay behind Regent Inns' decision to put seven of its Walkabout freehold sites on the market in a sale and leaseback deal.

Bob Ivell, the bar operator's executive chairman, said the marketing of a "small selection" of properties would help pay down some of the group's debt, which at the close of the operator's financial year last December stood at £80.6m net.

"We've never had much in the way of recognition in our share price for the freeholds we own," Ivell said today, "but the fact if you look back at various announcements we've made we've been considering this [sale and leaseback] route for some time."

Ivell refused to put a price on the properties, but the sale of the seven Walkabouts and one further vacant property is expected to raise around £25m.

Despite the move being a means of cutting back on its debt, Ivell said "ours may be high, but compared with some other privately-owned operators it isn't."

A deal has not been completed, although Ivell said the group was looking for high quality, 30 year leases and "very sensible, sustainable rents".

"This is the prudent thing to do," he added.

The prospect of a deal did little to revitalise Regent's shares, which were trading today at 16p, down 7.25 per cent.

Since reaching a 12-month high of 118p last April the group's shares have fallen more than 85 per cent, as tough trading and problems with some leases hit profitability.

Ivell would not comment on the progress of previously reported bid interest for the business, nor would he reveal the state of recent trading across the group.