£2.3m debt restructuring rejected by Punch Taverns lenders

Punch Taverns lenders reject £2.3bn debt restructuring

Major creditors in Punch call for fresh negotiations over pub group’s debt plan

James Quinn By James Quinn, Financial Editor5:36PM GMT 27 Jan 2014CommentsComments

Punch Taverns has offered bondholders an olive branch as its revised £2.3bn restructuring plans appeared to hit the buffers.

The pubs business, which operates more than 4,000 leased pubs across the UK, has told a major bondholder group it is willing to discuss its concerns after the investors said they would block a crucial vote scheduled for February 14.
The operating company has been attempting to restructure the debt within its two property company subsidiaries for 14 months.

Earlier this month it unveiled a new scheme, following negotiations with investors across the 16 different classes of debt in the Punch A and Punch B vehicles.

But the ABI senior noteholder committee, which represents funds managed by the likes of Kames Capital, Standard Life, Aviva and M&G, in addition to hedge fund investors Angelo Gordon, Oaktree Capital Management and Warwick Capital Partners, said they were unable to support the new proposals.

The ABI committee and the three hedge funds have enough of a holding to block the deal.

Punch, which is being advised by Goldman Sachs and Blackstone, said that the terms of the restructuring remained, but that “the company continues to be available to discuss with creditors their views of the restructuring proposals”.

It is understood that despite the threat from the investors, Punch feels that given the depth of negotiations to date, to begin to change the terms at this stage could risk alienating other investors who also have blocking stakes.

If the restructuring plan is voted down, administrative receivers will be appointed to both Punch A and Punch B, while Punch Taverns will continue to operate the sites.

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