7th Oct 2014 13:29
LONDON (Alliance News) - Pub operator Punch Taverns PLC Tuesday said it has gained the final approval for its debt restructuring proposals, after The Royal Bank Of Scotland Group PLC backed the proposals.
Last week, the company was given the approval by Lloyds Banking Group PLC for its debt restructuring proposals, and it was only waiting on the consent of RBS before its restructuring plan was complete.
In a statement Tuesday, Punch taverns said with RBS's approval, all shareholder, noteholder and securitisation creditor approvals have now been obtained, and its expects the completion of the restructuring to be on October 8.
The company ran up a debt pile of several billion pounds through an expansion spree, but was then hit hard when the financial crisis and ensuing economic downturn weighed on its trading. It also was hit by structural changes to the industry, such as a ban on smoking in pubs and a general fall in the number of drinkers going to pubs and bars.
Talks over the debt restructuring have dragged on for some time, after different classes of Punch creditors disagreed on various proposals to restructure the debt because any proposal would bring disadvantages to one class or another.
Last month, Punch Taverns finally moved into the final stages of agreeing the restructuring after bondholders and shareholders gave their approval for the plans.
The debt-for-equity deal will mean shareholders are left with 15% of the equity while bondholders take over the remainder of the shares. However, debt will be cut by GBP600.0 million.
The company said Tuesday that the total number of new shares issued in the capital of the company, in connection with the restructuring, firm placing, and from the share consolidation, will be just over 3.77 billion shares.
Punch Tavern shares were down 3.5% at 8.69 pence Tuesday afternoon.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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