London Town took three short-term loans from BVI company

An AIM-listed group London Town that operates 266 pubs because of some financial problems had to take three short-term working capital loans over the past 13 months. The company received three loans, totalling £6m, from the British Virgin Islands-registered Burac Invest and Trade, and it has been paying 10-15 per cent interest rates on these loans. On behalf of the Horizon Charitable Trust, this BVI company holds 48.4 per cent of the issued share capital of London Town.

London Town was established as a residential property developer. It came into the sphere of pub trade just in 2006 when it purchased 167 pubs for £94.7m from retired property investor.

The deal which was known as the first step in building London Town into a significant player in the pub industry, was funded through a £72.8m loan from Anglo Irish Bank, a £14m discounted bond issue and a £14.3m share placing. However, there is a drop in the pub industry now, so the acquisition along with three other smaller deals of London Town with the BVI company that followed in the next months, seems to be not in time.

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