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Liquid avoids Liquidation…for now

The dance floors of Liquid nightclubs around the country could be set to see their last night of revellers as their parent company, Luminar Group Holding PLC, has gone into administration. Luminar own 76 venues in the UK that includes Lava Ignite, Oceana, Project, Fuzzy Logic, Love Social and Vibe, as well as the Liquid brand; all of which could face closure.

It is reported that the Luminar Group, who employs 3,000 staff, owes somewhere in the region of £85 million to Lloyds TSB, Barclays and the Royal Bank of Scotland combined. The ongoing effects of the economic crisis appears to be the cause of the company’s woes as it saw recorded losses of £198 million last February, with sales dropping 19% to £137 million. Despite the company’s claims that it has the largest square footage of nightclub space in the country and that 11 million people visit one of its venues each year, a significant drop in numbers has caused irreparable financial damage.

Even though earlier this year the company’s lenders had agreed to temporarily waive banking covenants (the terms of the loan agreement) to aid a potential recovery, the company, based in Milton-Keynes, had been forced to put itself up for sale in an attempt to provide its shareholders with some return.  However, offers were only made for parts of the business and Luminar claimed this would fail to provide sufficient finances for its shareholders.

Luminar’s nightclubs have never been far from controversy and numerous councils and police forces have requested reviews of the company’s licence. This year the Sussex Police Force appealed for an examination of the licence possessed by the Liquid nightclub in Crawley, after over fifty incidents, including an alleged rape and numerous assaults, took place in under
12 months. The most recent incident to affect a Luminar venue saw Northampton Borough Council suspend the licence of Lava Ignite in Northampton after a crush in the club left a 22 year old student, Nabila Nanfuka, dead and another woman seriously injured in October.

The company has now been handed over to the administrators Ernst and Young. Joint Administrator Alan Hudson emphasise that for the time being Luminar’s venues would run “very much business as usual” as the company search for a buyer. Hudson wished to make it known that “while it has been necessary to seek the protection of an administration order, we have
already received a number of enquiries from interested parties which we are progressing.” However with the company’s slow decline over the past year and the instability of the current economic climate, finding a buyer may prove difficult and if one cannot be found soon Liquid and its sister venues may be closing their doors for good.

 

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