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Credit crunch forces Food and Drink Group into administration

Published:  08 August, 2008

Food and Drink Group (FDG) has been forced into administration after failing to secure the necessary funding to keep its portfolio of bars running.

Food and Drink Group (FDG) has been forced into administration after failing to secure the necessary funding to keep its portfolio of bars running.

The company, which owns the Jamies and Henry J Beans brands, has sold its bars to Mainpaint, a company backed by NBGI Private Equity (NBGI PE).

NBGI PE has acquired a portfolio of 17 branded and unbranded managed sites, with a geographic focus on London, along with 17 franchise sites under the Henry J Beans brand, including two within Hilton Hotels and 15 international sites.

In a statement FDG cited "challenging economic conditions" as its reason for the sale. It said: "The Group has been facing the most challenging economic conditions for decades which has reduced operational performance and has restricted investment in the Group's brands. These conditions have prevented the Group raising the further financing it needed. The sale of the business has secured the jobs of 300 of the Group's employees."

NBGI PE has taken on Nick Tamblyn, who developed the Tiger Tiger bar concept and brand, to oversee the development of its newly acquired portfolio. In a statement NBGI PE said that the Jamies and Henry J Beans brands have a "good level of consumer awareness in the South East market" and that it saw and a substantial opportunity to drive improvements to customer service and operations and refresh branding across the portfolio. Tamblyn joins at chief executive.

Food and Drink Group suspended its shares in June after exploring a variety of strategic options which failed to materialise, including raising new equity and reversing another business into the Group.

The sale is not expected to result in any return to shareholders. Shay Bannon and David Gilbert of BDO Stoy Hayward Llp have been appointed as joint administrators of the company.

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