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Punch Taverns' £2bn debt deal poised to launch

August 11, 2014


TROUBLED pub group Punch Taverns will today announce that the long battle between the firm's management, shareholders and lenders over Punch's 2.2bn debt pile will come to an end this week as its restructuring is set to launch in coming days.

After years of impasse over how Punch could best secure the future of its 4,000 pubs while meeting its debt obligations, the group in June made progress when management agreed to discuss a debt-for-equity swap with its creditors.

Under the deal Punch's lenders will take around 85 per cent of its market value in exchange for reducing its total debt by 600m.

The deal leaves existing shareholders holding just 15 per cent of Punch's stock.

Last month Punch said its bondholders had agreed to waive the conditions of its loan agreements on the condi-tion that its restructuring was launched by 11 August. However, it is understood that last minute talks could mean the company will miss this deadline today, but that this is not expected to put the restructuring at risk.

Like many pub firms, Punch was hit hard by the country's downturn after building up a considerable amount of debt during an acquisition spree before the economic downturn in 2008.

Punch Taverns declined to comment.

Punch Taverns PLC p 9.50 9.15 8 Aug 9.25 9.00 8.75 7 Aug 8Aug 4Aug 5Aug 6 Aug

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Source: City A.M. (UK)

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