Days after campaigners mounted a high profile protest over the eviction of one of its pub tenants, Admiral Taverns is facing the prospect of a pre-pack administration as its debt mountain grows.
Reports suggest the 2,700-pub group will undergo a form of pre-pack this week, with Lloyds bank taking a near-50 per cent stake in the business in exchange for a chunk of debt.
The prospect of a debt-for-equity swap has been on the cards for several months.
Admiral's debts are believed to be in the region of £1bn and the group's estate, built up over the years by buying tail-end sites from the likes of Enterprise Inns and Punch Taverns, has been badly hit by factors such as the smoking ban, duty hikes and the recession.
Admiral tenants have also complained of high rents and beer prices. Ironically one concerned supplier who contacted The Publican said Admiral were among the best payers in the sector.
Lloyds declined to comment on reports that it was expecting to write down close to £600m on Admiral, although sources suggested it had already put in place provisions for whatever outcome emerges this week.
According to the Financial Times Lloyds does not want to take a stake in Admiral greater than 50 per cent, since to do so would require the bank to consolidate its accounts into its own.
Peter Brook, the former boss of Tattershall Castle Group, has been engaged in trying to turn round the fortunes of some of Admiral's more challenged pubs.
More than 700 pubs were moved into what it called its 'Phoenix Division' earlier this year.
In a statement Admiral said: "Admiral Taverns is pleased to confirm that it is working on a financial restructuring which will provide a stable platform for the business.
"The plan does not involve any job losses, and it is intended that all payments to suppliers and contractors will continue to be made in the normal course of business.
"A further update will be issued when appropriate."