Lloyds Banking Group looks set to write off nearly half a billion pounds on its investment in pubs group Admiral Taverns. The group has been hit hard by the property slump, and could see Lloyds lose £450 million. Lloyds’s Bank of Scotland arm lent more than £850 million to Admiral Taverns, though with pub values suffering from the recession and a declining property market, the estate is now thought to be worth less than £500 million. Admiral Taverns owns more than 2,000 pubs and was lent the money in order to fund a number of acquisitions.
However, it seems that the bank is searching for potential buyers of the debt, which could see a hefty write-off . The reports follow a warning from Lloyds last month that charges on corporate loans turned bad could be as much as 50 per cent higher this year than last year, largely due to lending practices at HBOS. HBOS’s losses on corporate loans totalled £7 billion last year, with this year’s write-offs looking set to reach £11 billion of bad debts or credit .
Reports have also suggested that another of Lloyds’s investments, Edinburgh property developer Kilmartin, is on the brink of administration . The bank lent the firm £250 million, taking a 50 per cent stake, though the company now appear to be in difficulty, with Lloyds looking to instigate a major shake-up to avoid administration.
Lloyds Looking to Sell Debt
Wed, 17 Jun 2009
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