Punch revisits restructuring plan after stakeholder feedback

PUNCH Taverns is pressing ahead with restructuring plans but has altered course after engaging with stakeholders in recent weeks.

The Burton-based pub company said in an interim management statement released to the Stock Exchange this morning that following review of this feedback it is announcing revised restructuring proposals that reflect the material points which it has been able to address.

Effectively it is prioritising certain types of debt over others.

“The changes are intended to achieve an equitable solution by directing more of the finite cash resources available to the group to the senior classes of notes, whilst still providing good value recovery for the junior classes of notes,” it said.

“In the opinion of the board these changes are in the interests of all stakeholders and increase the likelihood of successfully implementing a restructuring.”

Punch suggests this will create a robust, sustainable debt structure with next planned refinancing not until 2029.

It is targeting a reduction in contractual debt service payments of over £600m over five years and reduced cash interest payments of c.£32m per year.

Meanwhile, the interim management statement for the 12 weeks to May 25 said the group’s profits are in line with management expectations.

It reports improving like-for-like trends in net income and says 246 pubs and certain other assets have been sold for £84m, slightly ahead of book value and at a multiple of 18x EBITDA.

Stephen Billingham, executive chairman of Punch Taverns, said: Our profit performance for the year to date has been in line with our expectations, with improving trends in the underlying business.

“Our trading performance has benefited from recent operational improvements through continued investment in our core pubs and increased field team support and we are on track to meet our full year profit guidance.

“The revised restructuring proposals reflect the results of an extensive process with stakeholders. Importantly, these proposals achieve an equitable solution by directing more of the group’s finite cash resources to the senior classes of notes, whilst still providing good value recovery for the junior classes of notes.”