East Anglia: Punch Taverns calls off key vote on debt restructure
09:35 12 February 2014
Pubs group Punch Taverns admitted defeat today in its attempt to convince lenders to back a controversial plan for tackling its £2.3billion debt mountain.
Britain’s second biggest pub owner, which has around 4,000 leased and tenanted pubs, including many in East Anglia, caved in to opposition from the bondholders by agreeing to cancel a vote on the proposals due to take place on Friday.
It will now reopen talks with lenders in a bid to achieve a “consensual restructuring” in the best interests of all stakeholders by mid-April, when it could default on its debts unless an agreement is reached.
In a last minute plea to bondholders last week, executive chairman Stephen Billingham warned the company faced uncertainty unless the restructuring proposals were accepted, and insisted that Friday’s vote would go ahead.
He said the company had spent 14 months trying to find a solution “to accommodate all of the conflicting views”, and that leders faced the prospect of default if the proposal was not accepted.
There are 16 different classes of debt within Punch’s two property company subsidiaries. Some bondholder groups expressed concern that the existing proposals were skewed in favour of shareholders and would still leave the company heavily in debt.
Mr Billingham said in an interview with the Daily Telegraph last week that there would be a “mess” if the vote was not passed, adding: “I have real concerns that nobody has an alternative out there that is realistic or sensible.”
The group said in a statement today: “Following feedback from a range of stakeholders, Punch has decided to withdraw the resolutions which were to be put to the Noteholder meetings convened for February 14, 2014 in order to facilitate a period of further engagement with stakeholders.
“As previously announced, both securitisations will default without a consensual restructuring. The board remains of the view that a consensual restructuring is in the best interests of all stakeholders and can be agreed ahead of the next covenant reporting date of April 15, 2014.”
Punch added that, for procedural reasons, Friday’s meetings would still have to be held but they would now be formally opened and closed without any business being transacted.