Brent Walker pounds 1.5bn in red

WHILE its founder, George Walker, continues to fight for his future in court, Brent Walker's debts are expected to top pounds 1.5bn when the deeply troubled leisure company reports interim results tomorrow. Although operating profits are thought to have increased, any surplus will be wiped out by interest payments - estimated at more than pounds 200m.

Despite another flood of red ink on top of 1993's loss of pounds 319m, the 56 banks shoring up Brent Walker are unlikely to pull out. The latest refinancing package, signed in March, extended its debt repayment schedule to 1997. The chairman, Sir Keith Bright, former head of London Underground, is said to be hopeful that the group's problems can be solved by then.

That may be more than the banks are betting on. Most are hanging on in the hope that Brent Walker's break-up value will rise. The firm's assets, primarily the bookmaker William Hill and Pubmaster, the country's largest independent pub chain with a 1,900-strong estate, are currently worth less than half the outstanding debt.

Other assets are already on the auction block. In recent months, it has sold the Bath Hotel in Bath for pounds 2.75m, two sporting clubs in Essex for pounds 3m, and the Hackney Wick greyhound stadium for pounds 5m.

John Leach, the firm's finance director, has suggested the company could sell assets worth pounds 100m by the end of 1995.

Plans to float William Hill remain shelved, after a backroom row between the bankers at the start of the year. Those with loans out to both Brent Walker and its subsidiary wanted to keep the group together. Others with an interest only in William Hill hoped to realise up to pounds 550m by taking it public. Brent Walker's lead bank, Standard Chartered, won the argument, but a ring-fence remains around the bookmaker.

That decision is behind the predicted upswing in group operating profits in the first half. The betting shops are said to have performed well, largely due to a relaxation in Government regulations.

Brent Walker first stumbled in 1990 after a decade of impressive growth figures. Its shares now languish at 4p and its founder, George Walker, is on trial after an investigation by the Serious Fraud Office. He and Wilfred Aquilina, 42, former finance director, are accused of inflating profits by devising bogus film rights transactions. They deny charges of theft, false accounting and conspiring to falsify accounts.

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