It's official: London Town goes into administration

After months of speculation London Town, the indebted property developer turned pub operator, has gone into administration.

In a complicated deal the group's holding company, London Town plc, has gone into administration. However two companies - GRS Pubs Ltd and GRS Pub Investments Ltd - which hold the group's 200-odd freehold pubs have not gone into administration and continue to trade as normal under the guidance of administrator David Chubb of PricewaterhouseCoopers (PwC).

A third entity, London Town Management Services Ltd, which provides support services to a number of pubs, is not in administration but has been sold by the administrator of London Town plc in a 'pre-pack' deal to a new investment vehicle, LT Pub Management Ltd (LTPM). This is part owned by members of London Town's former management, including chief executive Billy Buchanan.

PwC declined to reveal the price the new company paid for the business.

GRS Inns, which ran the operator's head office, and owned 44 leased pubs, has also gone into administration. PwC is running these pubs until buyers can be found through agents Christie + Co or until they revert to landlords, who include Punch Taverns and Enterprise Inns.

LTPM has also bought the group's head office, saving around 100 jobs, and will provide management services to the freehold estate.

Chubb said the short term solution was to find buyers for the leased pubs, while the group's lead creditor, Anglo Irish Bank, was content to trade the freehold estate for the time being.

"The bank isn't rushing to put the freehold sites on the market," said Chubb, "rather it is looking to put the estate onto a more stable footing. For now it is business as usual."

London Town's debts are understood to be in the region of £75m.