Lenders to Orchid, the privately owned pub and restaurant group that includes the Country Carvery and Sri Thai chains, have sent a restructuring team from PricewaterhouseCoopers (PwC) into the company, with the management's blessing.

The Times has learnt that HBOS, which financed the £571 million buyout of Orchid two years ago by GI Partners, the private equity firm, has drafted in the accountancy firm to advise on a financial restructuring. PwC was also asked to stand by to step in as administrator should this become necessary, although this is not the case at present.

HBOS and PwC declined to comment, but sources close to the process confirmed the terms of the accountancy firm's appointment.

A spokesman for GI Partners told The Times: “There was no insistence or request by the banks to appoint PwC.”

It is understood that while GI is paying for the review and formally appointed the accountancy firm, PwC will report to both GI and the bank on the company's restructuring options. Orchid is Britain's fifth-largest managed pub group, with 290 pubs.

Restructuring experts say that they have been inundated with mandates in the pub sector. They predict the sector will see a raft of administrations before Christmas as lenders get tough.

A spokesman for Orchid said that the company “is not in breach of its banking covenants”. However, industry sources speculate that the company broke its covenants this year, but secured a waiver from HBOS which allowed it to operate as normal.

Orchid said that PwC was advising the business on a financial restructuring that is a precursor to a move by GI Partners' to consolidate the pub sector using Orchid.

Sources close to the situation say that Orchid's banks may be willing to approve a deal that would crunch together the struggling pub chains and allow the operators to strip out costs.

It is understood that Orchid approached Robert Tchenguiz about a merger several weeks ago. Mr Tchenguiz, who owns the Town & City pub group, rebuffed the approach.

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