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Punch Taverns proposes cutting debts by £600m
18-08-2014 17:24
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Punch Taverns, the Burton upon Trent-based pub and bar operator, announced the full terms of its restructuring proposals on Monday, as it seeks to reduce its £2.26bn debts.
In an official statement, the company said the proposals were broadly similar to those announced last week, which were delayed as the group needed more time to ensure it had the support of debt holders and investors.
The deal, which would reduce the company's debts by £600m, is a debt-for-equity swap that will leave 85% of the company in the hands of the bondholders, reducing the value of the shareholders' holdings and costing them about £50m.
The company said the proposed restructuring has the support of a "broad range of stakeholders that own or control around 65% [of the company's debts]".
"The alternatives are not attractive to anyone," Stephen Billingham, executive chairman of Punch Taverns, is quoted as saying in the Guardian.
"It is a good deal for all and it is quite difficult to see why anyone would turn it down."
The company, which has been without a chief executive officer since Roger Whiteside joined Greggs in 2013, is planning to shut about 1,000 pubs over the next few years but Billingham said the forecast remained positive for a large number of businesses.
"The number of pubs in the UK will continue to decline, we are still 'over-pubbed'. But there are a good number of pubs that people are going to; with a modern environment people are happy to sit and drink," Punch's executive chairman said.
Shareholders will vote on the proposed rescue plan - the fifth attempt Punch has made to solve its financial crisis - on 17 September.
Punch shares were down 6.53% to 8.60p at 12:40 on Monday.
DC
In an official statement, the company said the proposals were broadly similar to those announced last week, which were delayed as the group needed more time to ensure it had the support of debt holders and investors.
The deal, which would reduce the company's debts by £600m, is a debt-for-equity swap that will leave 85% of the company in the hands of the bondholders, reducing the value of the shareholders' holdings and costing them about £50m.
The company said the proposed restructuring has the support of a "broad range of stakeholders that own or control around 65% [of the company's debts]".
"The alternatives are not attractive to anyone," Stephen Billingham, executive chairman of Punch Taverns, is quoted as saying in the Guardian.
"It is a good deal for all and it is quite difficult to see why anyone would turn it down."
The company, which has been without a chief executive officer since Roger Whiteside joined Greggs in 2013, is planning to shut about 1,000 pubs over the next few years but Billingham said the forecast remained positive for a large number of businesses.
"The number of pubs in the UK will continue to decline, we are still 'over-pubbed'. But there are a good number of pubs that people are going to; with a modern environment people are happy to sit and drink," Punch's executive chairman said.
Shareholders will vote on the proposed rescue plan - the fifth attempt Punch has made to solve its financial crisis - on 17 September.
Punch shares were down 6.53% to 8.60p at 12:40 on Monday.
DC
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