Punch Taverns delays vital restructuring plan in favour of more talks with stakeholders

STAFFORDSHIRE pubco Punch Taverns has decided to delay the implementation of a major capital restructuring of the business to allow it more time to talk to stakeholders.

The company said earlier this month that it faced a crucial period in its history and unless the restructuring was agreed then it faced defaulting in the near term.

It was due to put the plan forward at a meeting on Friday but said today it had decided to withdraw the resolutions following feedback from stakeholders.

It said the decision had been taken “in order to facilitate a period of further engagement with stakeholders”.

The company said late last month that it was willing to continue talks with creditors to try and get the restructuring approved.

The move came after senior lenders to the company rejected the restructuring plan put forward by the Punch board.

Punch had said that it was implementing its complicated Punch A and Punch B debt restructuring strategy to prevent the business from having to default in the near term.

The company said it was launching the capital restructuring of its A and B securitisations following a 14-month review of the business structure and discussions with stakeholders.

Punch said the purpose of the discussions had been to reach an agreement on the terms of a consensual restructuring for both securitisations.

It warned failure to implement a consensual restructuring was likely to lead to a default.

However, the group of lenders, represented by a special committee of the Association of British Insurers, said they could not agree with the Punch strategy and had threatened to vote against it at Friday’s meeting this month unless the pubco revised its plans and opened further talks.  

Punch said today: “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.”

It said that for procedural reasons, it remained necessary for Friday’s meeting to be held.  However, it said the proceedings would be carried out without the relevant resolution being proposed or voted on.