Partly Cloudy

Partly Cloudy

max temp: 12°C

min temp: 9°C


East Anglia: Punch shareholders to see stake slashed under debt-for-equity swap

13:04 27 May 2014

Shareholders in pubs group Punch Taverns would see their combined stake cut to just 15% under a debt-for-equity swap proposal.

Shareholders in pubs group Punch Taverns would see their combined stake cut to just 15% under a debt-for-equity swap proposal.

Shareholders in pubs group Punch Taverns could see their combined stake in the business cut to just 15% under a debt-for-equity swap, it emerged today.

The heavily indebted group has been attempting to negotiate a financial restructuring with its creditors for more than a year, but in Feburary called off a vote on its previous proposals amid opposition from key stakeholders.

Now, in a significant change from its previous approach, Punch is offering some junior noteholders under both the Punch A and Punch B debt securitisations a combination of not only cash and new junior notes but also new ordinary shares in the company.

In addition, some junior creditors would be invited to subcribe for ordinary shares at a “significant discount” to the current market price, in order to raise additional funds to repay junior notes under the Punch A securitisation.

Punch said the proposals were supported in principle by creditors who own or control around 34% of the A and B securitisations and more than 50% of junior notes in both securitisations and the group’s equity share capital.

However, it cautioned that: “Implementation of a consensual restructuring would require the consent of other parties outside of the stakeholder group, including shareholders, all classes of noteholders in Punch A and Punch B and other securitisation creditors. Accordingly, there can be no certainty that the proposals will proceed.”

Punch added that the proposals would “result in significant equity dilution for existing shareholders” who would be left with just 15% of the enlarged issued share capital.

If approved, the proposal will reduce Punch’s total net debt by £600million, leaving gross securitised debt of £1.582billion.

Punch added that extensions would also have to be sought to the covenant waivers agreed by A and B noteholders earlier this month as it would not be possible to complete the restructuring process by the current waiver deadline of June 30.

Punch is Britain’s second biggest pub owner with around 4,000 leased and tenanted pubs, including a signficant estate in East Anglia where, due to past mergers and acquisitions, it owns a number of former Tolly Cobbold pubs.


Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files

Please log in to leave a comment and share your views with other Ipswich Star visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by Ipswich Star staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique Ipswich Star account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

An armed police officer was called to Kesgrave as a safety precaution after a report was received of an injured dog today.

Last week’s article was about Oak Hill, the outstanding property just off Belstead Road on Oak Hill Lane, built in 1860 on a plot of land sold by Peter Burrell of Stoke Park, recaps John Norman, of the Ipswich Society.

Arthur Ransome’s tales of boats and adventure - many of which were set in Suffolk - changed the course of children’s literature.

Plans for Sizewell C are doomed to “evaporate” in the wake of insurmountable problems that will prevent its intended forerunner at Hinkley Point ever producing electricity, one of Britain’s leading environmentalists has predicted.

A Suffolk-based charity auction which has attracted bids from all over the world and raised more than £870,000 since its inception is aiming to break the £1million mark for national and local charities this year.

Fight or flight is fascinating, writes Ellen Widdup.

The A12 is now running smoothly after severe traffic delays earlier at Feering, Essex, caused by a two-car crash.

Some stores display a polite notice next to initial merchandise asking shoppers not to rearrange the items to create rude words.

Hundreds of youngsters braved the cold October temperatures to celebrate all things autumn at the Holywells Park Apple Day.

Suffolk police officers have been called to a clown sighting in Haughley, near Stowmarket this afternoon.

Most read

Most commented


Show Job Lists

Topic pages


Newsletter Sign Up

MyDate24 MyPhotos24