Cains bosses hope to hear from their bankers today

Jul 30 2008 by Alex Turner, Liverpool Daily Post

CAINS BEER Company could hear as early as today about its fate.

Anxious directors were kept on tenterhooks throughout the day yesterday, but the crucial phone call from the brewer’s bankers never came.

The Liverpool brewer is waiting for a decision from the Bank of Scotland to see if the bank will back its turnaround plans. Last night the Alternative Investment Market-listed firm had not been told of a decision and now expects to hear at some point today.

Cains’ fate has been placed in the hands of its bankers after HM Revenue & Customs issued a winding-up order in the High Court against the company, because of an unpaid tax bill.

Although an agreement in principle has now been reached between HMRC and the brewer, the plan is contigent on its bankers making funds available.

Cains has submitted plans and forecasts to the bank which chief executive Sudarghara Dusanj described as “prudent”. He remains confident the bank will back the plans.

The brewer’s tax problems form part of wider financial difficulties for Cains. Its six-month trading figures, announced on Monday, showed losses of £4.6m.

The company is being hampered by interest payments of about £200,000 a month to service total bank debts of £35m taken on to finance the reverse takeover of pubs group Honeycombe Leisure last year.

The acquisition added 92 pubs to its portfolio, which now stands at 109 pubs. But the consumer slowdown, smoking ban, bad weather and other sector problems have made trading conditions precarious for the whole business.

Mr Dusanj believes that, while financially painful in the short-term, the integration of Honeycombe Leisure into the Cains Beer Company will have long-term benefits.

If done successfully, the company will have control of brewing and retail divisions, a position it believes will provide a “very robust model”.

However its immediate future depends on the bank’s support to pay its overdue tax bill. Until then the winding-up order remains in place, which will see the company face a High Court appearance on August 12.

TURN to pages 8-9 for analysis of Cains’ predicament in difficult times for the brewing industry.

BILL GLEESON: PAGE 8

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