Bay Restaurant Group, the former sister company of Town & City Pub Company, negotiated a debt for equity swap with its banks four months before its merger with Stonegate in June 2011. The accounts show that in February 2011, Bay Restaurant Holdings, its parent company, entered into an agreement with its banks to restructure its loans and exchange £77.45m of debt for equity in the firm. The company’s accounts for the year to 27 February 2011 show a substantial increase in losses for the company, which disposed of its Ha! Ha! Bar and Grill sites in October 2010. The group reported a loss before interest and taxation in the year of £43.41m (2010: loss of £11.689m), on turnover down 13.1% to £89.941m. The figure for 2011 includes a loss of £10.361m from discontinued operations relating to its disposal of the Ha Ha sites to Mitchells & Butlers. Bay operated 78 sites at the year end (2010: 107).

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