The Royal Bank of Scotland (RBS) looks set to suffer a shortfall of more than £5m in respect of its loans to Cougar Leisure, the bar group that went into administration in January.
A report by administrator Bregbies Traynor states that £6,820,946 was outstanding when its appointment was made and the current shortfall is valued at £5,103,227, with none of the leases of the venues sold to date.
Cougar was created in July 2008 from Herald Inns & Bars, in the wake of a pre-pack administration. At the time it had 25 sites and RBS was owed £100m.
“The company initially traded profitably over a period of two years, and a number of sites were disposed of. This enabled the indebtedness due to the Bank of Scotland to be reduced,” said Nigel Atkinson, of Bregbies Traynor.
“Disposals continued in 2010 and it was hoped that once all disposals were concluded, the company would be solvently wound up. By November 2010 there were six sites remaining and they were producing insufficient trading margin to cover overheads.
"The directors concluded that the company could not continue to trade outside of an insolvency procedure.”
The administrator chose to cease trading at four of bars because it was “very uncertain whether these sites could trade with a surplus once payment of rent is taken into account”.
Christie + Co was brought in to market the venues, with the money raised, minus the cost of realisations, to be paid to RBS.
The report, which was filed on 8 March, says sales of two sites - Brannigans in Blackpool and Sprint in Manchester - were expected to be completed within three and six weeks respectively.
There’s been “minimal interest” in Brannigans in Manchester and Mood in Newcastle. Two expressions of interest have been registered for the Boardwalk in Sheffield, plus a “handful of offers”, none of which have been accepted, for View in Manchester.
