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East Anglia: Punch Taverns noteholders support covenant waiver as debt talks continue

11:11 30 April 2014

Punch Taverns noteholders have voted overwhelmingly in favour of the company

Punch Taverns noteholders have voted overwhelmingly in favour of the company's request for a waiver on covenant terms.

Pubs group Punch Taverns is on course to secure waivers to prevent it breaching covenants as talks continue to restructure its debts.


The group said today that 11 meetings of different classes of noteholders under its Punch A and Punch B securitisations had voted overwhelmingly in favour of its waiver request.

However, a further five meetings (four in Punch A and one in Punch B) were adjourned as inquorate after failing to attract instructions from at least 75% of noteholders eligible to vote.

These meetings will now be reconvened on May 13, when a lower quorum of 25% will apply.

Punch is Britain’s second biggest pub owner and has a strong presence in East Anglia, where, as a result of past mergers and acquistions, it includes a number of former Tolly Cobbold pubs.

It has been seeking to achieve a “consensual restructuring” of its debt pile for more than a year and has previously warned that without an agreement, or a waiver, it could become in default of covenant terms - as early as May 15 in respect of the Punch A securitisation.

Earlier this month, Punch reported firsthalf profits “in line with management expectations”.

Revenues for the 28 weeks to March 1 fell to £233.5million, from £243.3m in the corresponding period a year ago, and operating profit declined to £85.6m from £104.3m, largely reflecting restructuring and other one-off costs and impairment losses on the value on its property estate.

Before what Punch classed as “non-underlying items”, there was a pre-tax profit of £49.7m, compared with £26.2m at last year’s half-way stage. However, this year’s figure included a £29.9m contribution from the redemption of loan notes.

And after non-underlying items, including finance costs of £214.7m, Punch was left with a bottom line pre-tax loss of £174.9m, against a loss of £16.7m for last year’s first half.

However, the company insisted that it remained on course to deliver on its business plan and to meet its expectations for full-year profits, with average profit per pub up 4% across its entire estate of 3,956 sites during the first half.

Investment and disposal plans were also on track, it added, with investments completed at 170 of its core pubs, at an average spend of around £90,000, and 140 pubs and other assets having been sold for £51m, £6m ahead of book value.



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