News Column

Punch Taverns shelves £2.3bn debt rescue plan

February 13, 2014

OLIVER SMITH



PUNCH Taverns will shelve its controversial plans to in the pub chain.


Last week Punch warned that rejection of its plan to reduce its debt to 1.8bn would: "have a material negative impact on the business". Yesterday the firm said it had decided to withdraw the resolutions ahead of a 14 February meeting "in order to facilitate a period of further engagement with stakeholders". The Association of British Insurers (ABI), representing creditors with blocking stakes, hit out at the company's proposal last month, claiming that they had not seen the restructuring plans and only had a limited consultation with Punch.


Sources close to the ABI Senior Bondholder Committee told City A.M. yesterday that Punch had: "wasted the last two months trying to get their shareholder friendly deal to stick, whilst talking-up the risk of default."


A rival bondholder restructuring plan is also being worked on by senior lenders.


Last night their plan was described as "well thought out, certainly doable" and "well advanced" by people with knowledge of the plans. Punch Taverns' share price fell six per cent on the news to close at 11.88p yesterday after news of the pullback was revealed.


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Source: City A.M. (UK)


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