London Town poised for pre-pack

London Town, the Aim-listed pub group, is reportedly set to undertake a pre-pack administration this week after failing to find an alternate solution to tackling its debt burden.

The group, which is led by Billy Buchanan, could undertake the process as soon as this Thursday, when London Town shares are scheduled to be taken off Aim — London's junior market — according to a report in the Financial Times​ at the weekend.

It specialises in running lower-end tenanted and leased pubs, and also working with other groups such as Enterprise Inns and Punch Taverns to turnaround failed or failing outlets. It is said to have reopened 125 pubs in the past few months.

London Town, which has an estate of 407 pubs, started life as a commercial property developer before making its first foray in the pub sector with the acquisition of 167 pubs from Jack Petchey for £94.7m.

The deal was funded through a £72.8m loan with Anglo Irish Bank, a £14m discounted bond issue and a £14.3m share placing.

Last June the company revealed losses had doubled to £24.7m in the year to December 28, 2008 and that it had breached covenants on its £83.7m bank loans. At the time it said it was in talks with lenders over the terms of its banking facilities.

Net debt at the year end stood at £110.8m, which included three short-term working capital loans.

In September, when the company issued interim results, its said it was still in discussions with its lenders.