April 15, 2014 / 12:10 PM / in 4 years

Punch Taverns says breaches debt covenant

April 15 (Reuters) - Troubled British pub company Punch Taverns Plc said it breached a debt covenant related to Punch A, one of its two securitisation vehicles, in the quarter ended March 1.

The debt-laden company’s shares were down 5.7 percent at 12.98 pence on the London Stock Exchange at 1154 GMT on Tuesday.

Punch’s debt structure is complex and split into two securitised vehicles. Punch A holds 1.45 billion pounds ($2.43 billion) of gross debt, while Punch B holds 884 million pounds.

The pub company had said earlier this month that it will convene a meeting on April 29 to seek covenant waivers from noteholders of the two securitisation vehicles. (link.reuters.com/ren58v)

The waivers are necessary to prevent a default in payment, which in the case of Punch A may be as early as May 15.

Punch, like many 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 downturn.

The company, which has about 4,000 pubs, said on Tuesday pretax profit rose to 50 million pounds in the 28 weeks ended March 1 from 26 million pounds a year earlier. Revenue fell 4 percent to 233.5 million pounds.

Like-for-like net income up 1.4 percent in its core estate. ($1 = 0.5976 British Pounds) (Reporting by Aastha Agnihotri in Bangalore; Editing by Joyjeet Das)

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