5th Mar 2014 09:22
LONDON (Alliance News) - Punch Taverns PLC Wednesday again reminded its bond holders and other creditors that they stand to lose more of their investments if the sides can't reach a consensual deal to restructure the pub operator's debt in the next few weeks.
Talks over the debt restructuring have been dragging on, with different classes of Punch creditors disagreeing on various proposals to restructure the debt because any proposal will bring disadvantages to one class or another. However, the company and the creditors need a deal as Punch risks breaching covenants on the debt and defaulting.
The company had warned its creditors late last month that they faced potentially dire consequences if a deal isn't struck, and Wednesday reiterated those warnings through the debt issuing subsidiaries.
"The absence of a consensual restructuring in the near-term will result in a default in both the Punch A and Punch B securitisations. Furthermore, the issuers wish to emphasize that a default would be expected to culminate in the appointment of an Administrative Receiver at the borrower level in the relevant securitisation," the issuers warned in a statement.
It said it is now hoping to get a deal over the next few weeks so that it can formally launch a revised restructuring proposal ahead of the next covenant reporting date of April 15.
"Negotiation of the restructuring with key stakeholders and their advisers will be facilitated by Punch's advisors. The Issuers urge bondholder groups and other stakeholders to engage actively with Punch's advisors and each other in order to reach a consensual deal in the timeline set out above," the issuers said in the statement.
Punch Taverns withdrew its last set of proposals in early February so that it could continue talks about its debt restructuring with the stakeholders.
Punch Taverns shares were down 9.1% at 10.456 pence Wednesday morning, one of the biggest declines on the London market.
By Steve McGrath; [email protected]; @SteveMcGrath1
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Punch Taverns PLC