2nd Oct 2014 13:41
LONDON (Alliance News) - Punch Taverns PLC moved a step closer on Thursday to completing its restructuring plans after Lloyds Banking Group PLC gave its backing for the proposals.
The approval of the plans from Lloyds means completion of the restructuring plan now just requires the consent of The Royal Bank of Scotland Group PLC.
Last month, Punch 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 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 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.
Punch shares are up 2.9% to 8.75 pence on Thursday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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