Luminar falls into administration

25-Oct-2011 - Last updated on 27-Oct-2011 at 07:38 GMT

Luminar: the party is over

Luminar, the troubled nightclub operator, has fallen into administration after its banks withdrew support.

Luminar breached its banking covenants in August, with the waver due to expire tomorrow (27 October). Its shares were suspended at 4.15pm this afternoon after it became clear that the banks had pulled the plug.

It is thought that administrators from Ernst & Young have been lined up to oversee the process which could see the sale of the whole or parts of the business before the end of the year.

Suitors are expected to include Atmosphere Bars & Clubs, the Sun Capital Partners-backed nightclub operator, which was formed from the lion’s share of 3D Entertainment, and RCapital, owner of Little Chef and a number of night clubs.

In a statement released today, Luminar said: “During the waiver period the company has continued to investigate longer term restructuring options in discussion with the banking group [Lloyds TSB, Barclays Bank and the Royal Bank of Scotland] and other stakeholders.

“The banking group has today informed Luminar that it will not grant an extension to the waiver when it expires. Absent such waiver, the company is unable to meet certain of its repayment obligations to the banking group which fall due on 27 October.

“As a result it will also be unable to issue its half-yearly financial report covering the first six months of the financial year on a going concern basis on that date as required by the Disclosure and Transparency Rules. Accordingly, the directors of Luminar have no option but to take steps to place the company and certain of its subsidiaries into administration and to request the UKLA to suspend trading in Luminar’s shares with immediate effect.”

Earlier, Luminar confirmed that it’s shares had been suspended at the firm’s request at 25p per ordinary share, “pending clarification of the company’s financial position”.

Luminar’s shares closed at 0.38p on falling into administration.

Potential suitors for the business would include Atmosphere Bars & Clubs, the Sun Capital Partners-backed nightclub operator, which was formed from the lion’s share of 3D Entertainment.