One of Wales' biggest hospitality firms, SA Brain & Co, has confirmed it is working with corporate advisors Evercore and other stakeholders to try and navigate through the huge trading challenges of the Covid-19 pandemic.
With the industry 海角视频-wide faced with trading restrictions, and where in Wales new measures mean that pubs and restaurants cannot sell alcohol and have to close at 6pm, SA Brain has been forced to close it estate of more than 100 managed pubs, which employ around 1,500, as it would lose more money by remaining open.
Despite government support the industry in Wales, and across the 海角视频, is anticipating a steep rise in business failures, with many firms also considering raising new investment, including debt and equity, as well as offloading assets to provide a financial lifeline to get through the pandemic.
This has seen many large pub chains engaging or re-engaging with corporate advisory firms to assess funding options.
In the summer Young's and Wetherspoons were boosted with new equity investment. The sector is also expected to see more consolidation through merger and acquisition activity.
Chief executive of SA Brain, Alistair Darby, wouldn't be drawn when asked whether the business was effectively in play, either for new equity investors or even a trade sale option, through the involvement of Evercore. The Cardiff-based firm, established in 1882, remains family-owned with more than 200 individual shareholders.
Last year the business, which brands itself as Brains, sold its fast-expanding coffee chain business, Coffee#1 to Caffe Nero in a multi-million-pound. It initially sold 70% of the business, before later selling its remaining minority stake to Caffe Nero.
Just before the pandemic, back in March, it put 40 of its pubs up for sale. That process has since been abandoned.
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In a statement the company said:"Given the impact of Covid-19 on the entire hospitality sector, Brains with its advisors Evercore, is working with all stakeholders to navigate through this period of uncertainty."
Mr Darby said that he expects restrictions on the sector in Wales to be extended into 2021. He add that even in the unlikely scenario of the Welsh Government later this week lifting restrictions before Christmas, it would take at least two weeks to reactive the pub estate.
The chief executive said: "Opening and closing pubs is far more difficult than anyone understands. You have to furlough staff, get rid of stock and do a whole load of things to mothball the business so it is safe during a lockdown. Then reopening again takes time and effort. You have to bring people back, retrain, restock and so on. The minimum turnaround cycle for brewing beer and conditioning it such that it is good for consumption is two weeks.
"The hospitality industry is as strong, robust and as optimistic a sector there is, but it is not indestructible. By listening very carefully to what politicians are saying and the guidance we are being given, I cannot see a cat in hell's chance of restrictions being relaxed this Friday and I am fully expecting to be a significant lockdown post Christmas.
"Almost all firms in this sector will be running their businesses consuming cash, because government support will never be big enough to fill the hole that is created by not taking sales in our pubs. You cannot treat this industry like a pencil that you keep sharpening, as every time you keep sharpening it, there is less and less of the pencil and eventually there will be no pencil left.
"You are talking about an industry, which we are a big player in, that contributes billions to the Welsh economy. When you think of pubs, tourism, entertainment venues you name it, it is the second biggest employer in Wales, but we are the ones that have taken the significant brunt of it [ trading restrictions since March]."
He also disagrees with the Welsh Government's rationale for its latest measures, following the two week firebreak in late October and early November, that the hospitality sector is a spreader of the disease as alcohol disinhibits people from adhering to social distancing.
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He said that Brains and the wider hospitality sector had worked incredibly hard to create safe environments for customers and staff since the pandemic.
Mr Darby said: "We believe that the rules and restrictions we opened with in August ,with clear distancing and one-way systems, which were very carefully thought through, were enormously effective.
"We have seen very low levels of infections and the key piece of evidence is that we have only had seven members of staff testing positive for Covid out of 1,500 serving 850,000 guests. That must say the measures we took in our pubs were really effective."