Punch reaches breakthough in vital restructuring plans

STAFFORDSHIRE pubco Punch Taverns is to press ahead with restructuring plans after finally overcoming obstacles imposed by an influential group of shareholders.

The company has spent the past few months trying to push through the restructuring plans in an effort to avoid default on borrowing in the near term.

It had said a restructuring of securitisations was needed in order to avoid a default in both the Punch A and Punch B securitisations. If default had occurred then the company had warned the move would have a detrimental effect on shareholders.

However, a Special Noteholder Committee comprising representatives of the Association of British Insurers had not agreed to the proposals, hindering the company’s attempts to reach a conclusion.

The company said the new proposals had been submitted by a group of The ABI creditors, who together owned or controlled around 34% of the notes across Punch A and Punch B and over 50% of junior notes in both securitisations and the equity share capital of Punch, had put forward proposals of their own.

Talks between the two parties have been ongoing for months and several waiver extensions have had to be agreed in order for progress to be made.

However, in a statement to the London Stock Exchange today, the company said it had reached a breakthrough.

It said:  “Following completion of these discussions between stakeholders, the proposals are now supported by a broad range of stakeholders comprising the ABI Special Committee together with a number of individual funds or subsidiaries of such funds advised or managed by Alchemy Special Opportunities, Avenue Europe International Management, Angelo, Gordon & Co, Glenview Capital Management, Luxor Capital Group, Oaktree Capital Management, Seer Capital Management and Warwick Capital Partners.  

“The Stakeholder Group represents institutions who in aggregate own or control c.59% of the notes across Punch A and Punch B, c.54% of senior notes across Punch A and Punch B, c.62% of junior notes across Punch A and Punch B and c.54% of the equity share capital of Punch.”

It said each institution within the Stakeholder Group had agreed to support the proposals and to vote in favour of a restructuring, subject to certain conditions being met – one being that a restructuring is launched and documentation regarding the proposals sent to shareholders and noteholders by August 11, 2014.

Stephen Billingham, Executive Chairman of Punch Taverns, said: “We continue to make progress toward a consensual restructuring. These proposals have a high level of support, which reflects the hard work of a large number of stakeholders.  There are still hurdles to be overcome before reaching complete agreement but we view the current situation as very positive and that a successful restructuring can be implemented.  Continued constructive dialogue and determination from all involved will be required to achieve this.”