London Town, the Norfolk-based pub operator, has revealed that it is in discussions with lenders over the terms of its borrowing agreement after breaching covenants relating to a £83.7m bank loan.

In its annual report for the year ending 28 December 2008, the AIM-listed company said that it was confident that a "satisfactory agreement" could be reached in order to ensure the continued financial support. The company, which operates 314 pubs across the UK following the acquisition of 61 properties during 2008, posted a loss of nearly £25m despite more than doubling its revenue compared with 2007.

In a statement, London Town said: "The group continues to trade in line with expectations in what remains a challenging market place for the pub industry. "The group will continue to focus on the growth of its managed pubs division as well as continuing to review further opportunities for business growth possibly through selective acquisitions where appropriate."