Brewery bosses battling to salvage city company

Aug 5 2008 by Alex Turner, Liverpool Daily Post

THE owners of Cains brewery are still fighting to save the Liverpool company as they seek a solution to the firm’s cash crisis.

Cains faces a winding-up petition on August 12 after Revenue and Customs lost patience over an unpaid tax bill.

On Friday, the Bank of Scotland refused to provide money for Cains’ plans and the decision plunged the company’s immediate future into doubt.

The brewer, which is listed on the Alternative Investment Market, immediately asked that its shares were suspended.

They remained so yesterday.

Cains chief executive Sudarghara Dusanj, who bought the brewery with his brother, Ajmail, in 2002, said: “We and our advisers are continuing to work with and alongside our bank’s consultants to form a plan that will be acceptable to the bank.

“Given the constraints of being a quoted company and the current situation, we are unable to say any more. But under regulatory requirements any news will be released immediately.” He again thanked customers and staff for their “continued massive support” throughout the company’s difficulties.

Cains employs about 100 people at its brewery and 900 staff across its pubs estate.

The company consists of its Stanhope Street brewery, which produces Cains’ ales and own-label beers, and its retail division of 109 pubs.

The reverse takeover of Honeycombe Leisure and its 92 pubs last May cost £37m.

This was just weeks before the credit crunch and the smoking ban significantly hit revenues across the industry.

The expansion has severely handicapped the company’s cash position, with Mr Dusanj admitting the company is “overgeared”.

It costs Cains £200,000 a month to service the debt.

In the six months to April, Cains lost £4.6m, which was markedly worse than the previous loss of £2.8m, in the 14 months to October, 2007.

In its trading statement last week, the brewer acknowledged that its financial performance was unlike to significantly improve in the short-term, as it said it was anticipating full-year losses to be “higher than expected”.

alex.turner