Partly Cloudy

Partly Cloudy

max temp: 20°C

min temp: 17°C

ESTD 1874 Search

East Anglia: Punch Taverns boss urges creditors to agree a deal to avert default

11:10 28 February 2014

Punch Taverns has renewed its warning that it faces default unless creditors agree a deal to restructure its debt.

Punch Taverns has renewed its warning that it faces default unless creditors agree a deal to restructure its debt.

Archant

Pub owner Punch Taverns today repeated its warning that it faces the prospect of default unless creditors agree to a restructuring of its debt.

shares

Earlier this month, the group called off a vote on its latest proposals amid continued objections from bondholders, and agreed to a fresh round of consulation a process it began more than a year ago.

But in a trading update today, Punch said failure to achieve a “consensual restructuring” was expected to result in it failing to meet the next round of tests on its securitised debt, with default likely to follow.

The group said in a statement: “As announced on February 12, 2014, Punch has extended the period of engagement with stakeholders and the board remains of the view that a consensual restructuring is in the best interests of all stakeholders.”

It added: “In the absence of a consensual restructuring, failure to achieve the second quarter DSCR (Debt Service Cover Ratio) financial covenant in the relevant securitisation when reported on April 15, 2014 would result in a default in the relevant securitisation within a further 30 days.

“Moreover, failure to effect a restructuring in the near-term will lead to a default in both the Punch A and Punch B securitisation, which is expected to have a material negative impact on the business, including material dissynergies and disruption to the business.

“As a result, it is in the interests of all parties to agree a consensual restructuring ahead of the next covenant reporting date of April 15, 2014, and to put in place a sustainable long-term capital structure for the securitisations.”

Punch is Britain’s second biggest pub owner with around 4,000 leased and tenanted properties, including many in East Anglia where, as a result of mergers and acquistions, it includes a number of former Tolly Cobbold pubs.

In its trading update, for the first 28 weeks of its current finiancial year, Punch said it had continued to perform in line with management expectations, with core estate like-for-like net income for the half year expected to be broadly in line with the 1.5% growth reported for the first 20 weeks to January 4.

“Management expectations for the full year remain unchanged with the core estate expected to deliver like-for-like net income growth of up to 1%,” it added. “The pub investment and non-core pub disposal programmes remain on track with full year capital investment expected to be c£45million and disposal proceeds anticipated to be c£100m.”

Executive chairman Stephen Billingham said: “We are convinced that a consensual restructuring is by far the best outcome for all stakeholders, and we will continue to work with all stakeholders to reach a consensus on the restructuring. No-one can be in any doubt about the consequences of failing to agree a consensual deal.

“We call on all parties to work together constructively to agree a restructuring. Everyone has something to gain by agreeing a restructuring that will retain the material financial synergies and provide certainty and stability for the business from which all stakeholders will benefit.”

Related articles

shares

2 comments

  • Difficult to have any sympathy with this and similar firms who must take a lot of the blame for the decline of our traditional pubs by their greed.

    Report this comment

    amsterdam81

    Friday, February 28, 2014

  • Any chance of this article being re-written in plain English please...? Have I understood correctly that punch are essentially asking to be let off paying their debts...?

    Report this comment

    Big Daddy

    Friday, February 28, 2014

The views expressed in the above comments do not necessarily reflect the views of this site

Post Office

The branch on High Street will be shut for two weeks and is set for longer opening hours after works.

Mark and Spencer has posted a drop in quarterly clothing sales, after a colder May impacted demand for its spring and summer collections.

High street giant Marks & Spencer today posted a drop in quarterly clothing sales, after a colder May impacted demand for its spring and summer collections.

015 Flippie 1

A social media start-up which aims to rival the likes of Facebook and LinkedIn says it has won a significant investment ahead of its autumn launch.

Stephen Rose, SSE head of offshore wind generation

The man tasked with ensuring the smooth operation of a £1.6bn windfarm off the Suffolk coast has explained the challenges of overseeing 140 turbines capable of powering half-a-million homes and the contractual “crossroads” his firm faces next year.

Students at UCS in Interior Architecture and Design, have been taking part in a design competition to design an entrance canopy for the St Edmunds House apartments in Rope Walk.
Ross Carroll, director of Crown House Homes, left, with course tutor Dr Liana Psarologaki, and Annali Hubbard of Palmer & Partners estate agents, and some of the course students, Elliott Jones, Bryony Briggs, Dan Hutton, Amy Schuller and Michelle Villar

Apartment developers hold a design competition with university students

A member of staff at N2S bagging up scrap computer components ready for further destruction and recycling.

A Suffolk-based computer equipment lifecycle management company is celebrating after achieving accreditation allowing it to work at the highest level of Government.

From left, John Nicholson,  Andy Bloomfield  and Chris Pont of IJYI.

Ipswich-based software development firm IJYI has taken on its second apprentice in the space of six months.

Culture Secretary John Whittingdale, left, visiting Ipswich company IJYI.

Culture Secretary John Whittingdale has urged more small and medium-sized businesses in and around Ipswich to sign up to a scheme which provides the funding for the infrastructure they need to get fast broadband connections.

Post Office

The Post Office in a Suffolk town is moving to new premises, and will offer longer opening hours.

Dame Fiona Kendrick:, chief executive of Nestlé  UK & Ireland

Food giant Nestlé has announced plans to close its defined benefit pension scheme, sparking the threat of industrial action.

Most read

Most commented

Topic pages