The pubs group said the proposals would see junior notes in Punch A and Punch B exchanged for cash and new junior notes, as well as ordinary shares in the company in a debt-for-equity swap.
It said that a group of junior creditors also would subscribe for ordinary shares in the company at a significant discount to the current market price in order to raise additional funds which would be used to repay junior notes in the Punch A securitisation.
The proposals would result in a reduction in total net debt of
Punch said that the company's current issued share capital would represent just 15% of its total enlarged share capital following the restructuring.
"In consideration for the debt reduction, the debt-for-equity swap and placing contemplated by the Proposals would result in significant equity dilution for existing shareholders," the company said in a statement.
The group said that implementation of a consensual restructuring would require the consent of other parties outside of the stakeholder group, including other shareholders, all classes of noteholders in Punch A and Punch B, and other securitisation creditors.
"Any decision by the board to recommend a proposal involving dilution of existing shareholders would need to be carefully considered in terms of the value which it represents for existing shareholders," the company said in its statement.
The pubs group is trying to restructure its capital, its Punch A and Punch B securities, in an effort to improve its balance sheet and its debt to earnings ratio and attempt to avoid a default in the near future.
However, 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.
In a statement last month,
The pub operator had been in extensive talks between its stakeholders on a consensual restructuring of the its two Punch A and Punch B securitisations, a move it had said was necessary to avoid a near-term default in both securitisations, which in the case of the Punch A securitisation would have occurred by
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