7th Apr 2014 07:15
LONDON (Alliance News) - Punch Taverns PLC Monday said it will ask noteholders for covenant waivers, as it seeks yet more time to get a deal with its creditors for a broad restructuring of its debt pile.
In a statement, the pub operator said it will convene a noteholder meeting for April 19 so that the holders of its Punch A and Punch B securitisations can vote on whether to allow the covenants to be waived. It needs the waiver to ensure it doesn't default on the covenants while it continues talks about the debt restructuring.
"The requests include temporary waivers of the Debt Service Cover Ratio covenant and certain other provisions of the securitisation documents and, if granted, will expire at the latest on 29 August 2014. It is a condition of the waivers that a restructuring is launched by 30 June 2014," the company said in a statement.
It said talks on the broader debt restructuring have made progress, but need more time so that the proposals can be finalised and to allow stakeholders and their advisers to review and comment on the documentation necessary to implement them.
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.
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 shares were up 1.7% at 12.585 pence early Monday.
By Steve McGrath; [email protected]; @SteveMcGrath1
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