Old Monk collapses as bank pulls plug

The board of Old Monk, a pubs and sports bars operator, confirmed the City's fears over its financial position as it collapsed into administration.

The group, which is run by Gerry Martin, brother of JD Wetherspoon pub chain owner Tim, revealed last month it was in discussions with its bankers, the Royal Bank of Scotland, to save the company.

A statement from Old Monk, which owns 40 pubs and bars including the Springbok sports bars, said the outcome of these discussions had been "unsuccessful" and the board had resolved to appoint an administrator.

The board said this was the "best option for delivering a stable environment in which the company can continue to trade". Last week it sold off nine of its London pubs for £3.45m to make a dent in its £11m debts.

Shares in AIM-listed Old Monk were temporarily suspended yesterday at an all-time low of 6.5p, well below this year's high of 76p hit in April and valuing the group at just £1.7m.

The share price has collapsed in recent weeks amid fears RBOS would pull the plug on Old Monk. The group has so far failed to produce results for the year to April 2002. The company was expecting to make a full-year, pre-tax profit of £1.4m. Analysts had thought Mr Martin, who owns 50 per cent of Old Monk, may have approached the Martin family for a bail-out or launch a deeply discounted rights issue.