700 jobs face axe as Slug & Lettuce owner calls in administrators

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The Independent Online

SFI, the pubs group behind Slug & Lettuce, Litten Tree, Club Med and Bar Havana, has plunged into administration, putting up to 700 jobs in jeopardy.

SFI, the pubs group behind Slug & Lettuce, Litten Tree, Club Med and Bar Havana, has plunged into administration, putting up to 700 jobs in jeopardy.

Two-thirds of SFI has been sold to the property entrepreneur Robert Tchenguiz, who is buying 98 of SFI's 150 pubs for about £80m. He has also bought its head office, and more than 2,000 staff are transferring to his Laurel Pub Company business.

A spokesman for Mr Tchenguiz's investment vehicle, R20, said: "We've bought a very strong portfolio of pubs that represents the best in SFI's business."

It has bought the rights to SFI's brand names, and is taking on most of the Slug & Lettuce venues as well as most of the Litten Tree pubs.

Ownership of SFI's remaining 52 pubs is in the hands of PricewaterhouseCoopers, which is acting as administrator. It is keeping the remaining pubs open as going concerns, with their existing management in charge, and is hoping to find buyers for them.

David Chubb, of PwC, said: "We are reviewing the pubs and our intention is to find buyers for them."

The appointment of administrators marks the end of the troubled SFI group, which has teetered on the brink of collapse for more than two years. It delisted from the stock market in April 2003 after revealing a £20m hole in its accounts.

PwC said yesterday it was too early to say whether shareholders would recover any of their funds from the administration process.

Since delisting, SFI has attempted to stabilise its financial position in conjunction with its banks, and in January appointed Kroll Corporate Finance to conduct a review of its options, including a sale. According to Mr Chubb, putting the rest of the group into administration was the only mechanism that would enable the group to be broken up and allow Mr Tchenguiz to buy the properties he wanted.

The purchase by Mr Tchenguiz is the latest in a string of pub acquisitions. R20 bought the Laurel Pub Company for £151m in November, and in May, bought Yates Group for £202m. His tenanted pub business, Globe, has also made a number of acquisitions and is close to signing a deal to buy the Heritage Pub Company, which has a price tag of about £79m. This takes the amount spent by Mr Tchenguiz on pubs to about £700m in the past year.

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