Punch rules out administration option in restructuring plans

THE board of Punch Taverns has ruled out any pre-pack administration deal as a way of resolving ongoing restructuring proposals.

The pubco announced in February that it had agreed a set of restructuring proposals which it hoped would save the business millions of pounds and release cash for investment.

Since then the group has continued to engage with shareholders and as part of the consultation yesterday held a general meeting.

In a statement, the Burton-based business said: “A wide range of views was expressed, including the feasibility of a pre-pack administrative receivership of one or both of the securitisations to effect a restructuring.  Punch has reiterated that a pre-pack cannot be executed, is not in the interests of stakeholders as a whole and the board cannot support such an option.”
Some stakeholders had previously expressed their lack of support for the current terms of the Restructuring Proposal and these views were reiterated in the meeting.  However, the group said that while it was not anticipated that agreement would be reached at the meeting, the views expressed would provide a basis for further discussion.

“The board continues to believe that a consensual restructuring is in the best interests of all stakeholders and that a restructuring can be launched in the first half of 2013,” it added.
A recent external desktop property valuation undertaken by independent valuers, GVA, has indicated a current value of the core and non-core pub estates to be £1,415m and £906m for the Punch A and Punch B securitisation estates respectively.  

This compares to net debt of £1,366m and £835m as at March 2, 2013 for the Punch A and Punch B securitisations respectively.

Punch said an analysis of the anticipated ratio of net debt to EBITDA in 2018 indicated that the Restructuring Proposal would reduce this ratio by approximately three times in the Punch A securitisation and approximately five times in the Punch B securitisation compared to a scenario where a consensual restructuring was not effected and the business was placed into administration.