Punch Taverns hits back over restructuring criticisms

STAFFORDSHIRE pubco Punch Taverns has hit back at a group of lenders critical of the way the company is conducting its debt restructuring plans.

The Burton-upon-Trent based business announced in October last year that it had completed a detailed review of the group’s capital structure and that discussions were taking place with certain stakeholders on a range of options to restructure the group’s capital structure.

On Monday, the firm issued a revised set of proposals trying to placate majority lenders that their investments were being prioritised.  

In response, a special committee set up by the Association of British Insurers (ABI) criticised the plans in a statement for being too vague.

Punch said it noted the statement made by the ABI Special Committee in response to the restructuring proposals it outlined on June 10.

However, it said there were inaccuracies in what was said.

It said the statement referred to the ABI Special Committee’s financial and legal advisers having ‘not been provided with access to material parts of the standard due diligence information requested by them and there has been no meaningful engagement on the issues with the borrowers or the shareholder despite our best efforts’.

Also, the statement said that the ‘process of making public proposals to noteholders without prior negotiation and discussion and without the ability for noteholders to conduct appropriate due diligence is unsatisfactory and is not conducive to agreeing terms’.
 
In response, Punch said it agreed that a process of public proposals being made to noteholders, without prior negotiation and discussion, was not satisfactory. It said it had gone to great lengths to engage with the ABI Special Committee, including offering to meet with members on no less than five separate occasions during the last month.

It said: “Despite constructive discussions with a number of the ABI Special Committee members it is disappointing that the advisers to the ABI Special Committee have been unwilling to actively engage with Punch. One matter where Punch has been unable to reach agreement with the advisers to the ABI Special Committee relates to their professional fees, a proportion of which were incurred by them before any contact was made with Punch.

“The board considers these fee demands to be disproportionate to all other adviser fees, and at a level that Punch and, more importantly, the transaction, would be unable to support.”
 
Punch executive chairman, Stephen Billingham, added: ‘We have had constructive discussions with a broad group of stakeholders, including a number of members of the ABI Special Committee. We are somewhat surprised by the statement, which is inconsistent with that dialogue.
 
“There are a range of views within the ABI Special Committee and Punch and its advisers wish to continue to engage with them to reach a solution capable of being implemented.
 
“The latest Punch proposal is a reasonable one which we believe, when fully considered by all parties, including the ABI Special Committee, is capable of delivering a good solution for all stakeholders.”