The group will be renamed Northern Leisure in recognition of its geographic base in the North of England. It also plans to float off its healthcare subsidiary next month for about pounds 2.5m.
The debt-laden group was forced to renegotiate its banking facilities after losses at its French subsidiary. Nick Oppenheim, vice-chairman, said Whitegate lost pounds 14m on its investment in French discos.
'Just as restaurants in France are different, so are discos,' he said. 'Getting into France was a terrible mistake, especially as the group overpaid.'
He added that the remaining businesses in the UK were trading successfully and generating cash. 'We made profits of pounds 1.9m after interest in the 12 months to the end of August against a loss of pounds 1.5m in the preceding eight-month period,' he said.
The group has negotiated a two-and-a-half-year facility with its bankers to reschedule debts of pounds 32.5m. The banks will receive new equity of 3.2 million shares, valued at about pounds 1.3m at yesterday's closing price of 43 1/2 p.
The company has also pledged to reduce the debt by pounds 10m over the next two years. If there is a default it will have to issue warrants to the banks on a sliding scale.
Mr Oppenheim said the debt would be reduced by cash generated from trading and by the proceeds from the flotation of the healthcare business. 'The company has made trading profits of pounds 2m since 1 April,' he said.Reuse content