Pub operator Orchid Group went into administration this weekend but was immediately rescued via a financial restructuring, it emerged today.
The move, which follows weeks of speculation about the future of the UK's fifth largest pub operator, will see a sale of the majority of the business to a new company led by Orchid's existing management team, as part of a financial restructuring
This restructuring is believed to include Orchid's main financial backers, HBOS and Deutsche Bank, taking a small stake in return for relaxing banking covenants.
David Chubb, partner at PricewaterhouseCoopers and joint administrator of Orchid, said: "We are extremely pleased to have been able to affect an immediate sale of this business, particularly in the lead up to the festive season.
"Through the sale of the business, we have been able to save at least 240 of the group's pubs and 5,300 jobs across the UK."
As part of deal, an option to purchase the remaining sites has been sold. The administrators are hoping that these 48 sites will be able to continue and they are now working with Orchid to secure their survival.
In a statement, Orchid said: "The restructuring will ensure that Orchid has the financial flexibility to trade through the current economic environment and to aggressively lead the anticipated consolidation of the managed pub sector."
The pub operator was formed two years ago when US private equity firm GI Partners bought 290 former Spirit pubs from Punch Taverns for £571m.
By Daniel Thomas
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