Heineken takes on Globe Pub Co debt

Heineken has announced it has bought bonds and bank debt held by the Robert Tchenguiz-owned Globe Pub Company (GPC) worth a face value of nearly £180m.

The move now effectively means the Dutch brewer, which supplied GPC's 425 tenanted and leased pubs in the UK through its Scottish & Newcastle subsidiary, is the pub operator's largest single creditor.

The latest deal follows Heineken's purchase of £60m-worth of GPC's debt last month. The brewer now controls around half of GPC's totals debt, believed to stand at nearly half a billion pounds.

In March GPC admitted it was seeing more tenants handing back keys to their pubs.

In its most recent quarterly trading update, Globe said total turnover for the period of £10.8m was down 4.1 per cent, with earnings before interest, tax, depreciation and amortisation down 21.7 per cent at £4.1m. Year-on-year drinks revenue fell nine per cent, while rents fell £300,000 on the previous quarter.

It had also admitted it had breached its banking covenants and was in the process of appointing an independent consultant to steer the business through its current crisis.

In a statement Heineken said it had bought the Class A1 and B1 Notes and syndicated bank debt "at a considerable discount to face value", although it did not reveal what it paid.

The brewer said the net debt of GPC would now be consolidated on its balance sheet, and since it was acquired at a discount it reduces Heineken's own net debt position.

A subsequent book gain would be shown as an exceptional item in its accounts for 2009.