Partly Cloudy

Partly Cloudy

max temp: 16°C

min temp: 12°C

ESTD 1874 Search

East Anglia: Punch Taverns sets out details to debt-for-equity swap

15:01 18 August 2014

Punch Taverns chairman Stephen Billingham.

Punch Taverns chairman Stephen Billingham.

Pub company Punch Taverns today confirmed details of a “critical” plan to tackle its debt mountain with an equity swap which will see the stake of shareholders slashed.

shares

Punch, which is Britain’s second-largest pub owner with around 4,000 tenanted and leased properties, is to hold meetings with shareholders and creditors on September 17 in a bid to secure approval.

The debt-for-equity swap is intended to reduce the group’s borrowings by £600million but will leave its current shareholders owning just 15% of the company.

Punch, which underwent major expansion through a programme of acquisitions before the financial crisis hit, has been left nursing debts of around £2.3billion, even after selling off hundreds of pubs.

The group, which is based in Burton-upon-Trent and has a strong presence in East Anglia where, as a result of past mergers and acquisitions, it owns many former Tolly Cobbold pubs, has been in negotiations with its lenders for nearly two years. The process has been highly complex because there are 16 different classes of debt within two property company subsidiaries owned by the pub chain.

In February, it admitted defeat over an earlier plan which did not involve a debt-for-equity element and was opposed by a number of bondholders who expressed concern that it was skewed in favour of shareholders.

Punch said yesterday that the current plan, which was first announced in June, had so far received the support of 65% of bondholders and 54% of shareholders.

However, the restructuring deal will have to be backed by at least 75% of each group of stakeholders in order to take effect.

Chairman Stephen Billingham said today: “It is of critical importance that shareholders and noteholders vote in favour of the resolutions in order to implement the restructuring and avoid the adverse consequences for the group of the restructuring not proceeding.”

Setting out details of the proposal, Punch said that its existing debt structure was “unsustainable”, with total net debt leverage of 10.8 times earnings.

In the absence of a restructuring, this ratio would increase further, with “material adverse consequences for all stakeholders and, in particular, for shareholders,” it warned.

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

Christopher Hayman of Hayman Distillers with his children Miranda and James.

Essex gin maker Hayman Distillers is celebrating after winning a Gold award at this year’s International Wine and Spirits Competition (IWSC).

Bakery chain Greggs saw like-for-like sales rise 5.9% in the six months to July 4.

Higher breakfast sales and a bigger range of healthier products helped Greggs grow underlying profits by 51% in the first half of the year.

Barclays chairman 

John McFarlane.
Photo: VisMedia

Barclays boss John McFarlane today signalled plans to ramp up growth, squeeze costs and streamline the business after announcing a 25% rise in first half profits.

Uncertainty over Government policy is holding back potential investment in the offshore wind sector, according to East of England Energy Zone director James Gray.

The absence of a clear Government stategy is leaving the offshore wind industry “in limbo”, according to a leading figure within the sector in East Anglia.

The rate of growth in the UK economy rebounded during the second quarter of 2015, but the manufacturing sector continued to struggle, according to official figures.

UK growth bounced back in the second quarter of 2015 as gross domestic product (GDP) increased by 0.7%, according to official figures.

Ransomes Jacobsen operations director Simon Rainger addresses staff as the company's last Ransomes Commander mover leaves the production line.

Staff at Ipswich-based turf maintenance machinery maker Ransomes Jacobsen have marked the end of an era, with the last Ransomes Commander mower having rolled off the production line.

Charles Manning on the new patio area at Bears Boutique Bar and Bowling in Star Lane, Ipswich

Businessman Charles Manning is pleased with the way his Bears bowling bar and grill is fitting into the entertainment offer in Ipswich – and with the business community.

Barker Gotelee has welcomed Lucy Underwood, conveyancing assistant, Linda Crawford, solicitor, Nicky Sunderland. trust and estate planning practitioner, and Lisa Hobbs, junior secretary.

Ipswich-based law firm Barker Gotelee has welcomed four new employees across its expanding business.

A Ryanair aircraft atStansted Airport.

Budget airline Ryanair today reported a 25% jump in earnings for the first quarter of its new financial year.

Alton Towers in Staffordshire.

Alton Towers owner Merlin expects annual earnings for its theme parks business to drop by as much as £47million this year following last month’s rollercoaster crash.

Most read

Most commented

Topic pages