Club operator Utopian breaches bank covenants
Latest accounts from Utopian Leisure Group, the North-East bar and club operator led by Bob Senior, show it breached its banking covenants, according to the M&C Report.
The breach, which related to bank debt of £13.38m and occurred after the year end, triggered a clause that meant Utopian's banks could demand repayment at any time.
The accounts, which cover the year ended 31 December 2007 — and were filed between Christmas and New Year 2008 — show a narrowing of pre-tax losses for the year to £23,000, against £379,000 the year before.
As a consequence the group's auditor KPMG said that following the breach there was "material uncertainty which may cast significant doubt on the company's ability to continue as a going concern".
Following the sale of a subsidiary called Utopian (Three) Limited — formed to buy Tokyo Industries in August 2006 — the company has since repaid bank loans totalling £6.5m.
However, loans of £6.9m remain outstanding and are payable on demand.
Utopian said it was in discussions with its banks "who have indicated that they will continue to make these loans available to the company, at existing levels in the form of an on demand facility.
"The directors have no reason to believe that this facility will not continue to be made available following finalisation of the renewal process."
Utopian was formed by Senior, a former managing director of Ultimate Leisure, finance director Tim Wynn and Allan Rankin.
