Partly Cloudy

Partly Cloudy

max temp: 14°C

min temp: 7°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

Fire crews rescue the man in Rumburgh - photo Jane Davis

A driver is lucky to have escaped after his car careered off the road and into a pond in Rumburgh, say eyewitnesses.

There are around 17 miles of tailbacks on the northbound A12 this evening.

A property in Leavenheath was burgled on Monday.

Police are appealing for information after a man who exposed himself to a 16-year-old boy on Tuesday.

Nowton Park daffodils. Pictured is George Cole.

March winds and April showers should give a very traditional flavour to the weather over the next few days as youngsters across Suffolk start their Easter school holidays.

The Charlatans' frontman Tim Burgess is looking forward to returning to V Festival this year

The Charlatans are among the latest names added to this year’s V Festival.

Staff at Sainsbury's on Woodbridge Road Andrew Rodger (left) and Martin Palman with youngsters at Noah's Ark Pre-School taking part in a fundraising 'bunny bounce' to raise money for a better outdoor play area and staff Sam Chambers (front L to R) Sophie Woodward and Sue Woolard.

Dozens of toddlers have helped an Ipswich pre-school raise funds to improve its outdoor play area – by taking part in a ‘Bunny Bounce’ challenge.

Hollesley.

Opposition has been voiced over proposals to use part of the grounds of a residential home for nine properties, including much-needed affordable housing.

The design of the proposed new clifftop shelter at Felixstowe - a replacement for an earlier modernistic design labelled as a monstrosity by some councillors.

Proposals for a new clifftop shelter labelled by a community leader as a “monstrosity” have been ditched in favour of a more traditional design.

Enthusiasts at Bawdsey Transmitter Block at Bawdsey Manor to mark the 80th anniversary of the Daventry Experiment which proved radar was possible. A £1.4m lottery bid has been lodged to preserve the old radar station.

Enthusiasts have submitted an application to the Heritage Lottery Fund for grant aid towards a £1.4million project to preserve one of Britain’s most precious pieces of war-time history and turn it into a major attraction.

Most read

Most commented

Topic pages