Foundation Inns EIS on hold

Foundation Inns, the pub company funded through tax efficient EIS subscriptions, has put its Noble Pub Fund on hold as a result of the credit crunch. Ian Grundy, who manages the company with Gavin Drew, said that he had shelved plans for the £15m fund, which was set up at the beginning of 2008 to raise additional finance to acquire new sites because the market for fund-raising was not there.

Grundy said that he was looking at alternative ways of financing the expansion of the company and was talking to high net worth individuals interested in buying property about setting up propcos for them on their behalf and forming an operating company to manage the business.

Grundy told M&C Report: "I believe that it is important for a small company to reach a certain scale and although our ultimate aim is to raise more funds to do this, given the current market we are looking at alternative ways of financing.

"Midway through next year I think there will be good deals out there if you have the cash to buy assets. Over the next 12 months if the fund-raising environment returns, we will go back to the market with the aim of setting up a new EIS fund or a straight equity fund."

The group recently announced it had set up a new company called Foundation Inns Management Company to run distressed assets and is in discussions with two parties to take over the management of two small pub groups. Grundy said that the company, which currently has six pubs, still had financing available to acquire two more sites and was looking for freeholds located in affluent suburbs of London or county towns that were instantly cash positive.