Partly Cloudy

Partly Cloudy

max temp: 14°C

min temp: 7°C

ESTD 1874 Search

East Anglia: Punch shareholders to see stake slashed under debt-for-equity swap

13:04 27 May 2014

Shareholders in pubs group Punch Taverns would see their combined stake cut to just 15% under a debt-for-equity swap proposal.

Shareholders in pubs group Punch Taverns would see their combined stake cut to just 15% under a debt-for-equity swap proposal.

Shareholders in pubs group Punch Taverns could see their combined stake in the business cut to just 15% under a debt-for-equity swap, it emerged today.

shares

The heavily indebted group has been attempting to negotiate a financial restructuring with its creditors for more than a year, but in Feburary called off a vote on its previous proposals amid opposition from key stakeholders.

Now, in a significant change from its previous approach, Punch is offering some junior noteholders under both the Punch A and Punch B debt securitisations a combination of not only cash and new junior notes but also new ordinary shares in the company.

In addition, some junior creditors would be invited to subcribe for ordinary shares at a “significant discount” to the current market price, in order to raise additional funds to repay junior notes under the Punch A securitisation.

Punch said the proposals were supported in principle by creditors who own or control around 34% of the A and B securitisations and more than 50% of junior notes in both securitisations and the group’s equity share capital.

However, it cautioned that: “Implementation of a consensual restructuring would require the consent of other parties outside of the stakeholder group, including shareholders, all classes of noteholders in Punch A and Punch B and other securitisation creditors. Accordingly, there can be no certainty that the proposals will proceed.”

Punch added that the proposals would “result in significant equity dilution for existing shareholders” who would be left with just 15% of the enlarged issued share capital.

If approved, the proposal will reduce Punch’s total net debt by £600million, leaving gross securitised debt of £1.582billion.

Punch added that extensions would also have to be sought to the covenant waivers agreed by A and B noteholders earlier this month as it would not be possible to complete the restructuring process by the current waiver deadline of June 30.

Punch is Britain’s second biggest pub owner with around 4,000 leased and tenanted pubs, including a signficant estate in East Anglia where, due to past mergers and acquisitions, it owns a number of former Tolly Cobbold pubs.

shares

0 comments

Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files
Comments

Please log in to leave a comment and share your views with other East Anglian Daily Times visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by East Anglian Daily Times staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique East Anglian Daily Times account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

Mulberry Tree owner Des Scicluna who has been having problems with N Power for the last four years.

A frustrated pub landlord has taken action after an energy supplier pursued him for unpaid bills for more than four years – despite the firm never having supplied gas or electricity to the establishment.

A view of the TATA Steel Plant in Scunthorpe.

Liberty House has confirmed it will put in a formal bid to buy Tata Steel’s UK assets.

Probes by HM Revenue and Customs (HMRC) into tax avoidance schemes raked in an additional £494 million in income tax for Treasury coffers last year, figures from law firm Pinsent Masons show.

Probes by HM Revenue and Customs (HMRC) into tax avoidance schemes raked in an additional £494 million in income tax for Treasury coffers last year, figures from law firm Pinsent Masons show.

File photo dated 15/09/14 of HSBC cash machines, as the bank posted a sharp drop in profits for the first three months of the year after it was hit by

HSBC has posted a sharp drop in profits for the first three months of the year after it was hit by “extreme levels of volatility” in financial markets in January and February.

Rain Newton-Smith, CBI Director of Economics

Trading conditions for the UK’s small and medium-sized enterprises have stabilised over the past quarter, according to the CBI’s new Quarterly SME Trends survey.

Most read

Great Days Out

cover

Click here to view
the Great Days Out
supplement

View

Most commented

HOT JOBS

Show Job Lists

Streetlife

Newsletter Sign Up

Great British Life

Great British Life
MyDate24 MyPhotos24