News: Liquid operator sinks towards administration
Luminar Leisure, the operator of the Liquid & Envy nightclub in Rotherham town centre, is preparing to go into administration. Luminar has a branded estate of over 70 nightclubs and bars and the largest square footage of nightclub capacity in the country. They posted a loss before tax for continuing operations before exceptional items for the year ended 26 February 2011 of £1.1m compared to a profit of £5.5m in 2010. Statutory loss from continuing operations after exceptional items was £184.6m.
They had been in discussion with its banks (Lloyds TSB, Barclays and the Royal Bank of Scotland) on the restructuring of the group's debt arrangement.
They had been operating with a waiver of certain covenants in their three year banking facility but now the banks have informed Luminar that it will not grant an extension to the waiver. This has meant that the company is unable to meet certain of its repayment obligations and the directors have no option but to "take steps to place the company and certain of its subsidiaries into administration and to request the UKLA to suspend trading in Luminar's shares with immediate effect."
As well as negotiations with their banks, Luminar had also initiated a marketing process in respect of a potential sale of the group's underlying business and assets and had received indicative bids in response. Four properties were also sold in recent months which generated a net cash inflow of £3.7m.
The group's share price had sunk to below 1p following declining trade, largely as a result of the smoking ban, changes to licensing laws that boosted competition, and their target markets tightening their belts in the economic downturn.
Last month, the 22,000 sq ft, 2,000 capacity, Liquid & Envy nightclub in Rotherham town centre was put up for sale. The 1.965 acre site on Main Street also includes 150 car-park spaces and is being advertised as an investment and a development opportunity.
It is not yet clear how the operators' administration would affect the sale but it is believed that the venue will remain open and operate as a going concern.
Richard Taylor, general manager at Liquid in Rotherham, said: "We will be open for normal trade from tomorrow night and will be trading Friday, Saturday, Sunday and Monday as normal.
"Our company will deal with the problems it is having but from the club, we carry on as normal."
Luminar website
Images: liquidclubs.com
Rotherham
