Cains future decided in next 48 hours
The future of Liverpool brewer Cains will be decided by its bank, the Bank of Scotland, in the next 48 hours.
Cains is in breach of its banking covenants and executives at the Bank of Scotland are considering its future.
The brewer, though, insists it doesn't need new money - it simply requires the Bank of Scotland to honour existing overdraft facilities.
Cains faced a winding up order up from HM Revenue and Customs but has now agreed to a repayment plan on its outstanding tax liabilities.
Chief executive Sudarghara Dusanj told the Morning Advertiser: "We need the bank to take a long-term view.
"The bank has got to be a partner with us - not just a lender. Customs have come back to us with a fair deal. We have breached some covenants, which has put our facilities under review.
"But this is a good business - turn-arounds don't happen that quick. We are 17-18% up on the brewing side and the pubs are trading in line with the market - they were trading 15% down but have now stabilised.
"We hope the bank sees what the team here has created in the past six years."
Cains Beer Company has been in talks with its bankers about its £35m debts since at least April. If the bankers reject the plan, Cains would have until a High Court hearing scheduled for 12 August to save the company.
Share dive
Yesterday, Cain's shares plunged 57% after it announced six-month losses to 28 April of £4.6m while admitting the figures "may cast significant doubt on the group's ability to continue as a going concern".
Cains undertook a £37m reverse takeover of Honeycombe Leisure in May 2007, which saw Cains acquire 92 pubs and a listing on the Alternative Investment Market.
The Bank of Scotland provided £40m, of which £30m was a loan facility, £5m in working capital and £5m to fund refurbishment of the pubs.
Cost of servicing the interest on debt amounted to £1.2m in interest for the most recent six month period, compared with just £66,000 a year ago.
"We are working to turn it around but we do appreciate we are overgeared," he said. "It's a big burden to the business."
