11th Aug 2014 08:13
LONDON (Alliance News) - Punch Taverns PLC Monday said the launch of the restructuring of its Punch A and Punch B securitisations has been delayed, as it is yet to conclude talks with some of its stakeholders.
Last month, the debt-burdened pubs operator said that its noteholders had voted in favour of waiver requests, as part of its debt restructuring proposals.
However, Punch Taverns said Monday that the launch of the restructuring has been delayed, as some additional time is needed to conclude discussions between certain stakeholders, and for the documentation to be finalised.
"The board believes that a restructuring on terms which are broadly similar to those announced on 26 June can be launched within the 10 business day cure period. However, there can be no certainty that a restructuring will be launched within this period," the pubs operator said in a statement Monday.
Punch Taverns received a debt restructuring proposal in late May 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.
"The board continues to believe that a consensual restructuring is required to avoid a near-term default in the Punch A and Punch B securitisations, which would have material adverse consequences for all stakeholders and, in particular, for shareholders," the company said Monday.
Punch Taverns shares were down 0.5% at 9.11 pence Monday morning.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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