(Adds details, analyst comment; updates share price)
May 27 (Reuters) - British pub operator Punch Taverns Plc said on Tuesday that certain debtholders had proposed a restructuring that would likely reduce its 2.3 billion pound ($3.9 billion) debt pile by about 26 percent.
However, Punch Taverns' stock sank as much as 31 percent after the company said the proposed debt-for-equity swap plan would mean that current shareholders would represent just 15 percent of the total issued share capital.
Punch Taverns, which has about 4,300 pubs, was hit hard by Britain's double-dip recession and, in January, proposed a restructuring plan to avoid a default, which was rejected by shareholders.
The new proposals, announced on Tuesday and backed by 34 percent of the company's debtholders, would reduce its total net debt by about 600 million pounds, Punch Taverns said in a statement.
"These terms are different to previous ones: they would result in a 26 percent reduction in total net debt, materially reducing financial risk, but at the cost of equity dilution," Numis Securities analysts said in a note.
The company's debt structure is complex and split into two securitised vehicles. Punch A holds 1.45 billion pounds of gross debt, while Punch B holds the rest, according to the company's 2013 annual report.
The new proposals include junior notes in Punch A and Punch B to be exchanged for a combination of cash, new junior notes and shares in a debt-for-equity swap.
Punch Taverns declined to provide any additional comments on the proposal when contacted by Reuters.
However, the company said it would not be able to launch the proposals before the June 30 default deadline, meaning that Punch A and Punch B would require an extension to covenant waivers to start the restructuring.
Numis cut its rating on the company' stock to "sell" from "hold" and lowered its price target to 10 pence from 11 pence.
Punch Taverns shares were down 29.3 percent at 10.57 pence at 1132 GMT. They fell to a low of 10 pence in morning trading on the London Stock Exchange. ($1 = 0.5936 British Pounds) (Reporting by Aastha Agnihotri in Bangalore; Editing by Gopakumar Warrier and Savio D'Souza)