18th Jul 2014 16:11
LONDON (Alliance News) - Debt-burdened pubs operator Punch Taverns PLC said Friday that noteholders had voted in favour of waiver requests, as part of its debt restructuring proposals.
The company said it had held sixteen meetings with noteholders, and in each meeting noteholders had voted "overwhelmingly in favour" of the waiver requests.
Punch Taverns saw its shares plummet in late May after it said it had received a debt restructuring proposal from a group of its creditors which would reduce the group's total net debt by around GBP0.6 billion but significantly dilute existing shareholders' equity in the company.
The proposals would see junior notes in Punch A and Punch B exchanged for cash, new junior notes, and new ordinary shares in a debt-for-equity swap. A group of junior creditors also would subscribe for ordinary shares in the company at a significant discount to the current market price in order to raise additional funds which would be used to repay junior notes in the Punch A securitisation.
However, the proposals would also dilute the current shares in the company to 15% of its proposed new share capital.
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.
Punch Taverns has several times warned 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.
Shares in Punch Taverns closed at 9.30 pence Friday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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