East Anglia: Punch seeks waivers to avoid default as talks over debt restructuring continue
12:19 07 April 2014
Pubs group Punch Taverns is to seek a waiver to avoid default while it continues to seek agreement over a restructuring of its debts.
In an update today, Punch said discussions had made progress over the past five weeks but further time would be required to finalise proposals and to allow stakeholders and their advisers to review and comment on them.
As a result, meetings for Punch A and Punch B noteholders will be held on April 29 vote vote on covenant waiver requests, in order to avoid the risk of a near-term default in the securitisations, which in the case of the Punch A, could occcur as early as May 15.
The requests include temporary waivers of the debt service cover ratio covenant and certain other provisions of the securitisation documents. If granted, they expire on August 29 at the latest, but with a requirement for a restructuring to be launched by June 30.
Punch said today: “The covenant waiver requests require the support of all classes of noteholders and other securitisation creditors. There can be no assurance that the necessary noteholders and other securitisation creditors will support the covenant waiver requests, or that agreement will be reached on the terms of a consensual restructuring.”
In its last update at the end of February, Punch repeated its warning that it faced the prospect of default unless creditors agree to a restructuring of its debt.
It came after the group called off a vote on its latest proposals amid continued objections from bondholders, and agreed to a fresh round of consulation − a process it began more than a year ago.
Punch is Britain’s second biggest pub owner with around 4,000 leased and tenanted properties, including many in East Anglia where, as a result of mergers and acquistions, it includes a number of former Tolly Cobbold pubs.