News Column

Punch warns bondholders of default threat

February 6, 2014

Martin Flanagan

Punch Taverns has urged bondholders to accept a controversial restructuring deal to slash the tenanted pub giant's GBP2.3 billion debt mountain, or face default. Stephen Billingham , executive chairman at Punch, whose 400 Scottish pubs include Edinburgh's Malt Shovel and the Cairns Bar in Glasgow , said the business would face uncertainty if the plans were not accepted at a vote on 14 February.It has already been rejected by several groups of bondholders with blocking stakes, who are pressing for talks to be reopened. But Billingham said that the company had spent 14 months trying to find a solution "to accommodate all of the conflicting views".He added: "The next few days will be some of the most important in the company's history. Everyone has something to gain by voting for the proposal."Failure to effect a restructuring will lead to a default in the securitisation, which is expected to have a material negative impact on the business."One bondholder said: "The deal ... fails on three counts - the commercial terms are unacceptable to multiple groups of lenders, the structure of the new notes is flawed, and the documentation is unsignable."

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Source: Scotsman, The (Scotland)

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