Cains' future in bank's hands

July 29, 2008: The future of Cains — the Liverpool brewer saved from the brink of closure by the Dusanj brothers in 2002 — is in the hands of the Bank of Scotland (BoS) and could be decided in the next day or so.

Yesterday the brewery reported a loss of £4.5 million for the six moths to April 28, and revealed that it was in advanced negotiations with HM Revenue and Customs (HMRC) regarding outstanding duty and other liabilities.

It also said it had failed to reach agreement with its bank relating to the renegotiation of financial covenants attaching to the group's loan and other facilities.

Chairman Roy Morris said: "In the absence of a significant improvement in trading conditions during the second half, it is ... anticipated that group
operating losses for the full year to October 28, 2008, will also be higher than expected."

He said the board — now minus finance director Paul Morgan, whose resignation, with immediate effect, was announced yesterday — believes that Cains now has the brand, the vision and the entrepreneurial flair and experience to withstand the present downturn.

He added: "Going forward, the board also has confidence in its ability to turn the business around and to successfully grow it and the Cains brand into a nationwide force in line with our vision to become Britain's favourite beer company."

It could all come to naught though if the BoS fails to agree new lending terms.

Chief executive Sudarghara Dusanj told The Morning Advertiser: "The bank has got to be a partner with us — not just a lender. Customs have come back to us with a fair deal. We have breached some covenants, which has put our facilities under review.

"But this is a good business — turnarounds don’t happen that quick. We are 17 to 18% up on the brewing side and the pubs are trading in line with the market — they were trading 15% down but have now stabilised."

Read the full Morning Advertiser article here.

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