East Anglia: Punch Taverns boss warns of default if debt deal is rejected
10:56 05 February 2014
The boss of pubs group Punch Taverns has warned its lenders to accept a deal to restructure its £2.3billion debt burden or face the prospect of default.
Stephen Billington, executive chairman at Punch, said that the business would face uncertainty if its plans were not accepted in a vote due to take place on February 14.
Punch owns more than 4,000 leased and tenanted pubs, including a strong presence in East Anglia where, due to past acquisitions and mergers, it includes a number of former Tolly Cobbold properties.
It has been in talks with its lenders and shareholders for more than a year, with initial proposals having been published in February 2013, followed by a revised scheme in June and another in December.
Several groups of bondholders, with stakes sufficient to block the deal, have already said they will vote against the latest package.
They are understood to feel that the proposals unduly favour the interests of sharesholders and are pressing for the company to engage in further talks
However, Mr Billingham said that the company had already spent 14 months trying to find a solution “to accommodate all of the conflicting views”.
He said: “The next few days will be some of the most important in the company’s history. Everyone has something to gain by voting for the proposal.
“Failure to effect a restructuring will lead to a default in the securitisation, which is expected to have a material negative impact on the business.
“Punch has a very good underlying business with a positive future and its assets provide a focal point for 4,000 communities across the UK.
“Just as Punch’s operational performance is turning the corner, the last thing the business needs is for continued uncertainty.”
However, in an intereview with the Daily Telegraph, Mr Billingham warned there would be a “mess” if the propsoals were not passed, adding: “I have real concerns that nobody has an alternative out there that is realistic or sensible.”