Punch restructure edges closer

By John Harrington, M&C Report

04-Sep-2014 - Last updated on 05-Sep-2014 at 08:01 GMT

If all requisite approvals are obtained, the restructure proposals are expected to become effective on 8 October

Punch Taverns’ restructure has edged closer after more creditors gave their backing to its proposals.

Undertakings to support the proposals have now been given in respect of c72% of the notes across the Punch A and Punch B securitisations and c54% of the issued share capital of Punch, the group announced this morning. At least 75% of shareholders and lenders are required to back the proposals.

The increased support results from market purchases of Class B3 notes issued by the Punch A securitisation by seven holders of junior classes of notes in the Punch A and Punch B securitisations and an agreement that the funds have entered into with Morgan Stanley & Co International plc.

Punch said the expected timetable for the proposals to become effective is not affected by this announcement.

Shareholders and noteholders are due to meet on 17 September, and if all requisite shareholder, noteholder and other creditor approvals are obtained, the restructure proposals are expected to become effective on 8 October.

Last month Punch Taverns announced the delayed launch of its restructure. The terms of the proposals are broadly similar to those announced on 26 June and will see a debt for equity swap resulting in a equity dilution for existing shareholders.

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3 comments

What could possibly go wrong?

Posted by david, 06 September 2014 - 16:35 GMT

I know it makes uncomfortable reading, but I choose not to lead my life in a deluded bubble.

As Bill Bonner continued . . . "QE programmes distort asset prices. Then people invest their money foolishly because they are reacting to distorted asset prices. Stock prices are based on two things that can't possibly continue - cost cutting and zero interest-rate policies. The reality is that stocks' prices could easily be cut in half. But this time it is not just a few foolish investors who will lose money. It will be millions of investors, business people, households and governments".

I think he is spot on, and for precisely the same reasons I think other assets such as commercial and domestic property are likely to experience the same massive correction. The UK housing market is distorted beyond belief.

So, reasons to be cheerful - what could possibly go wrong? With the UK national debt standing at £1,304,600,000,000 (77.3% of GDP) forecast to rise to 79.9% of GDP next year and the interest to service that debt forecast at 57 billion next year, 62 billion the following year and 68 billion the year after that - the outlook looks particularly bright doesn't it?

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Only happy when unhappy

Posted by The way Forward, 06 September 2014 - 12:41 GMT

Some people are only happy when they are unhappy !!! OR have a mission ?

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Gosh! It's taking a while isn't it?

Posted by david, 05 September 2014 - 09:37 GMT

Which reminds me of a piece recently written by Bill Bonner - an economics author of some note. An extract:

"Men willingly believe what they want to believe. At least, they believe it as long as they can. As long as stocks rise, for example, they can believe that the economy is recovering nicely, and that they will get richer and richer by owning pieces of someone else's business.

They call it 'investing'. But that is mere flattery. Someone else already did the investing when they built the factories and developed the business. 'Investing' implies you are doing something that will provide more or better products and services - something that improves productivity and makes us better off.

But when you buy shares in an existing business, you are simply buying out someone else's position. Will the price of your shares go up? Or down? Who knows. One business grows, Another shrinks. You cannot know in advance which will be which. And taken all together, the shares in a nation's businesses are unlikely to grow more than the economy itself.

In the U.S. over the last 6 years real growth has averaged 0.9% per year. But stocks have gone up more than 130% in the U.S. How is that possible?"

Just a thought as we're all getting excited about some "boom" and the level of the FTSE. Anyone know when Quantitative Easing ends?

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