Punch announces revised restructuring proposals

By John Harrington

- Last updated on GMT

Related tags Debt

Punch said it aims to complete its restructure by the end of the month
Punch said it aims to complete its restructure by the end of the month
Punch Taverns, the tenanted and leased pub company, has announced revised proposals for the restructuring of its £2.4bn debt securitisation and says it hopes to have the restructure completed this month.

The proposals include improving covenant protection for creditors and accelerating repayment of senior noteholders ahead of other stakeholders.

Punch is also proposing giving senior noteholders the option to sell their senior notes for cash if they accept the proposals, and creating an option for certain senior noteholders to waive their rights to note prepayment.

Punch is targeting a reduction in contractual debt service payments of over £600m over five years, reducing cash interest payments of c£32m per year and deleveraging at the group level equivalent to c1.8x EBITDA by 2018.

Executive chairman Stephen Billingham said: “The revised restructuring proposals reflect the results of an extensive process with stakeholders. Importantly, these proposals achieve an equitable solution by directing more of the group’s finite cash resources to the senior classes of notes, whilst still providing good value recovery for the junior classes of notes.

“Support is required from a number of stakeholders who will have a range of views on the revised restructuring proposals. We will continue to engage with all stakeholders and will be inviting all stakeholders to attend a meeting this week to discuss the detail of the revised restructuring proposals and next steps before progressing to implementing a restructuring in June 2013.”

Punch said it was on-track to meet full-year profit expectations, with like-for-like net income was down 0.7% in Q3, against a decline of 3.3% in the 40 weeks to 25 May.

In the year to 25 May, 246 pubs and other assets have been sold for £84m, slightly ahead of book value and at a multiple of 18x EBITDA.

Punch said 94% of its pubs are on substantive agreements, and investment in its core pubs continues at an average spend of c£100,000 per pub.

Billingham said: “Our profit performance for the year to date has been in line with our expectations, with improving trends in the underlying business. Our trading performance has benefited from recent operational improvements through continued investment in our core pubs and increased field team support and we are on track to meet our full year profit guidance.”

Related topics Punch Pubs & Co

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