$815m loan may be written off by Lloyds

26 August 2009

Lloyds Banking Group may have to write off an $815 million loan that it provided to UK pub group chain Admiral Taverns, it has been suggested.

According to the Financial Times, accounts filed yesterday (August 25th) show that the two parties have held discussions regarding the possibility of introducing a debt-for-equity swap deal in an effort to restructure the company's balance sheet.

The report noted that "the introduction of significant additional equity by new equity investors" may also be an option for debt-laden Admiral, which was found to have breached banking covenants.

"Discussions have taken place between the interested parties," it stated, adding that a debt-for-equity deal is the most likely outcome.

Lloyds revealed earlier this month that it made a loss of $6.52 billion in the opening six months of 2009, a fall from the $4.56 billion proforma profit it recorded in the same period last year.

Written by Asim Shah

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development