Premium's funding delay adds to pub sector gloom

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The Independent Online

Shares in Premium Bars and Restaurants (PBR) were suspended yesterday after a delay in securing fresh financing meant it could not file its accounts on time, deepening the gloom in the beleaguered pub sector.

PBR, which owns the Prohibition and Living Room bar chains, said it was "close to finalising the terms of its short-term funding requirements", but until revised banking covenants are agreed it is not able to issue audited accounts for the 12 months to 30 June.

Its statement came as it emerged that Globe Pub Company, the tenanted pub operator owned by the property tycoon Robert Tchenguiz, is poised to call in financial advisers to review "operational issues" after a dire trading update left it close to breaching banking covenants. Globe Pub Issuer, the vehicle that owns 424 of the company's 450-plus pubs, said earnings before interest, tax, depreciation and amortisation fell by 20.2 per cent to £5.3m, on beer sales down by 8 per cent for the quarter ended 29 November.

Many pub operators have endured a torrid time over the past 12 months, as falling sales of beer, driven by the credit crunch and smoking ban, as well as rises in alcohol excise duty, hit their bottom line.

Shares in PBR, which have plummeted by 99 per cent over the past year, were suspended at 1.75p on Monday, giving it a market capitalisation of just £700,000. The billionaire Reuben brothers have a 32.5 per cent shareholding in PBR. The brothers have been linked to a potential purchase of the 20 per cent stake held by Dawnay Day, the beleaguered financial services and property firm, but it is unclear if talks took place.

On 17 December, PBR said it had not yet obtained a renewal of its banking facilities, but stressed that the banks continued to support the business. The pub operator said the banks' preferred route is for PBR to raise additional funds to meet its short-term cash requirements, and that it was in discussions with key shareholders to generate additional funding, but it raised questions over its ability to continue trading as a going concern. On 17 December, PBR said: "However, if such additional funding is not secured, the board cannot be certain of the continuing support of the company's banks."

Under the rules of the Alternative Investment Market, there is a requirement to issue accounts to shareholders within six months of its year end.

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