May 27 Debt-laden British pub company Punch
Taverns Plc said on Tuesday that certain stakeholders
had proposed a restructuring of its securitisations that would
likely reduce the company's debt by about 26 percent.
Shares in the company, which has about 4,300 pubs, sank more
than 20 percent to 11.50 pence in morning trade on the London
Punch's debt structure is complex and split into two
securitised vehicles. Punch A holds 1.45 billion pounds ($2.44
billion) of gross debt, while Punch B holds 884 million pounds,
according to the company's 2013 annual report.
The latest proposals included junior notes in Punch A and
Punch B to be exchanged for a combination of not only cash and
new junior notes, but also ordinary shares in the company in a
In addition, a group of junior creditors would subscribe to
ordinary shares in the Company at a significant discount to the
current market price to raise additional funds to repay junior
notes in the Punch A securitisation.
The proposals, which has the backing of stakeholders with a
34 percent interest in the debt of the company, would result in
a reduction of about 600 million pounds from total net debt, the
company said in a statement.
Punch Taverns, like many other pub owners, was hit hard by
Britain's double-dip recession and is trying to reduce 2.3
billion pounds ($3.85 billion) of debt built up before the
In January, Punch launched a restructuring of its debt, the
culmination of months of talks with investors to come up with a
proposal it said was needed to avoid default.
($1 = 0.5936 British Pounds)
(Reporting by Aastha Agnihotri in Bangalore; Editing by