Restructuring Further Information

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

PUNCH TAVERNS PLC

("Punch" or the "Group")

Further information following completion of restructuring

Punch announced earlier today that all remaining conditions to the restructuring proposals set out in the combined circular and prospectus dated 18 August 2014 (the "Prospectus") had been satisfied. This announcement provides further information following the termination of certain interest rate swaps and the related issue of Super Senior Hedge Notes and a Super Senior Swap Loan as contemplated by the Prospectus.

Termination of interest rate swaps

Following the termination of certain interest rate swaps provided to the Punch A and Punch B securitisations as contemplated by the Prospectus, the issuer under the Punch A Securitisation has issued £123.4 million in principal amount of Super Senior Hedge Notes to The Royal Bank of Scotland plc and the issuer under the Punch B Securitisation has entered into a Super Senior Swap Loan with Citibank N.A., London Branch in an amount of £49.0 million (net of repayments made today). 

Impact of the restructuring

The Board of Punch believes that the completion of the restructuring creates a robust and sustainable long-term debt structure for the Group, with a £0.6 billion reduction in total net debt (including the mark-to-market on interest rate swaps).

Gross securitisation debt[1] of £1,604 million at completion (following the termination of the interest rate swaps referred to above) has an initial effective interest rate of c.7.7% including PIK interest (c. 7.1% cash pay interest).

The consolidated net debt to EBITDA ratio falls to c.7.7x[2], based on net debt at completion of £1,508 million.

Further details of the debt structure of the Punch A and Punch B securitisations following completion of the restructuring is set out in the appendix to this announcement and on Punch's website www.punchtavernsplc.com. The appendix also contains further information on current trading and Punch's share capital.

Stephen Billingham, Executive Chairman of Punch, commented:

"I am pleased to announce the completion today of our restructuring, bringing to an end the long and complex restructuring process.

We believe that this restructuring will provide stability to the business and will allow Punch to build on recent improvements in trading and lead to further deleveraging, through strong cash generation.

It is a great credit to our partners and staff that we have been able to drive our business forward over the last few years against the backdrop of the uncertainty caused by the restructuring process. We can now focus on improving our business through capital investment in our pubs, getting the best partners working with us and providing the support our partners need to launch and develop their pub businesses.

We have good operational plans to build on the positive momentum delivered in 2014 and will provide a further update when we announce our annual results on 12 November 2014"

8 October 2014

Forward-looking statements

This announcement and the appendix includes "forward-looking information" within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. These forward-looking statements are not based on historical facts, but rather reflect Punch's current expectations concerning future results and events and generally may be identified by the use of forward-looking words or phrases such as "believe", "aim", "expect", "anticipate", "intend", "foresee", "forecast", "likely", "should", "planned", "may", "estimated", "potential" or other similar words and phrases. Similarly, statements that describe Punch's objectives, plans or goals are or may be forward-looking statements.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Punch's actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied by these forward-looking statements. Although Punch believes that the expectations reflected in these forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct.

Disclaimer

This announcement is not intended to and does not constitute or form part of any offer to sell or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the proposals set out herein or otherwise, nor shall it (or the fact of its distribution) form the basis of, or be relied on in connection with, any contract therefor or be considered a recommendation that any investor should subscribe for or purchase or invest in any securities.

The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933 as amended (the "Securities Act") or under any U.S. state securities laws and may not be offered or sold within the United States unless any such securities are registered under the Securities Act or an exemption from the registration requirements of the Securities Act and any applicable state laws is available.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

PUNCH TAVERNS PLC

("Punch" or the "Group")

Further information following completion of restructuring - appendix

1. Issue of shares and share consolidation

In connection with the restructuring proposals, Punch has issued a total of 3,771,151,200 new ordinary shares as contemplated by the Prospectus comprising:

· 2,498,146,197 new ordinary shares issued to holders of junior notes in the Punch A and Punch B securitisations as part of the restructuring of such notes;

· 1,273,005,000 new ordinary shares issued to a group of seven holders of junior classes of notes in the Punch A and Punch B securitisations; and

· 3 new ordinary shares issued to the Company Secretary to facilitate a 1 for 20 share consolidation which, as previously announced, is expected to become effective on 13 October 2014.

Admission of the New Ordinary Shares to the Premium Listing segment of the Official List of the UK Listing Authority and the admission of the new ordinary shares to trading on the London Stock Exchange's main market for listed securities became effective, and dealings commenced, at 8:00 a.m. today. Punch confirms that, as at 8.00 a.m. today, its issued and listed share capital consists of 4,437,003,420 ordinary shares with a nominal value of 0.04786p each, with voting rights, of which none is held in treasury. Therefore, the total number of voting rights in Punch will be 4,437,003,420. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, Punch under the FCA's Disclosure and Transparency Rules (the "DTRs").The proposed consolidation of Punch's ordinary shares (including the new ordinary shares to be issued pursuant to the restructuring proposals) into consolidated ordinary shares, on the basis of 1 consolidated ordinary share for every 20 existing ordinary shares and new ordinary shares is expected to become effective at 8:00 a.m. on 13 October 2014.

2. Notification of Director/PDMR Shareholding

On 8 October 2014, Punch issued 3 new ordinary shares to the Company Secretary, Ed Bashforth, a person discharging managerial responsibilities for the purposes of the DTRs, at a subscription price of 8.9 pence per share (the closing middle market share price on 7 October 2014), in order to facilitate the share consolidation described in the Prospectus. Following the issue of these new ordinary shares, Mr Bashforth has an interest in 199,280 ordinary shares. For the purposes of DTR 3.1.3, the above transaction took place in the United Kingdom.

3. Punch A debt structure

Immediately following completion of the restructuring, the revised debt structure of the Punch A securitisation is set out below:

1 An interest rate swap is in place to swap the LIBOR interest rate on the Class M3 floating rate note to a fixed rate of 5.954%

4. Punch B debt structure

Immediately following completion of the restructuring, the revised debt structure of the Punch B securitisation is set out below:

5. Additional financial information

EBITDA:

Punch expects to announce underlying EBITDA towards the middle of its previously published guidance range when it reports full year results on 12 November 2014:

1 EBITDA before non-underlying items. The financial year ended 23 August 2014 included an additional 53rd week

Trading during the first six weeks of the current financial year has been broadly in line with management expectations and we expect to meet our expectations for the full year.

Disposal proceeds guidance (FY15):

Disposal proceeds for the full year to 22 August 2015 (FY15) are now expected to be not less than £60 million. 

This follows a strong start to FY15 with £33 million of proceeds realised in the first six weeks, £10 million of which was due to the delayed completion of the sale of a package of five core London pubs announced on 3 June 2014.

The disposal programme for the remainder of FY15 (which is expected to be at reduced rates of disposal) will be focussed on the disposal of tail end pubs in the non-core estate.

Capital investment guidance (FY15):

In line with our plan to invest in around two thirds of the core estate over the next five years, focussing on improving the customer environment, we expect to spend in the region of £45 million of capital expenditure across the Group in FY15.

Post restructuring interest charges and cash balances:

Gross securitisation debt of £1,604 million at completion of the restructuring has an initial effective interest rate of c.7.7% including PIK interest (c. 7.1% cash pay interest). Punch expects to maintain ongoing cash liquidity balances in the region of £85 million. Additional free cash flow after scheduled debt service payments is expected to be used in the first instance to pay down the Super Senior Hedge Notes and Super Senior Swap Loan.