Bankers may pull plug on Old Monk

The future of the pubs group tiddler Old Monk looked increasingly uncertain last night as its shares collapsed amid fears its bankers would pull the plug on its operations.

The company, which is run by Gerry Martin – brother of JD Wetherspoon boss Tim – saw three-quarters of its market value wiped out after its shares plunged 21.5p to 7p. This left the operator of Springbok sports bars valued at just £1.65m.

Old Monk, which has failed to produce results for the year to April, was locked in urgent talks with its bankers Royal Bank of Scotland yesterday. Its directors were "considering the options available". The group has debts of £16m yet was only expecting to make a full-year, pre-tax profit of £1.4m.

Analysts said the options included persuading the Martin family to come to the rescue, or a deeply discounted rights issue. "But if I was a betting man, I would bet on it going into receivership," one leisure analyst added.

Separately, the problems at Old Monk exacerbated a bear raid on rival pubs group SFI, which owns the Slug & Lettuce chain. The group was forced to rush out a trading statement insisting that trading was on track and that it was within its existing bank facilities. Andrew Latham, the chief executive, admitted the group's new opening programme had left it unable to pay suppliers for such items as new carpets. He said the problem would "self correct" but not until Christmas at the earliest.