Punch to split and offload 2,200 pubs in bid to tackle £3bn debt mountain

Trade unions accused Punch Taverns of "abandoning" local pubs after it revealed it would de-merge its Spirit division into a separate listed company.

Chief executive Ian Dyson, who joined in September from Marks & Spencer, where he was finance director, said Spirit would include all of Punch's 800 managed pubs - which the company directly controls - and about 550 leased pubs, which are run by landlords.

About 450 "non-core" pubs within the spirits business will be either sold or closed.

Punch itself will keep about 3,000 "high-quality" leased pubs but will close or sell a further 2,200 outlets at a rate of about 500 a year, less than under previous closure plans in 2009 and 2010. The de-merger will cost about 30 million and will be completed in the summer.

A Punch spokeswoman said it was too early to say which pubs would be closed or sold. In Scotland, the group has 21 managed and 371 leased pubs.

But one industry source suggested that fewer pubs may close north of the Border because Punch had already shut some outlets and was starting from a lower base than in England.

The group saddled itself with its debt mountain through an acquisition spree that included a 2.7bn deal for the Spirit managed pubs in 2005.

Punch's plan allows the group to avoid defaulting on payments relating to its Punch A and B bonds - which had been speculated - although the firm said it would enter "dialogue" with investors over the restructuring.

Trade union GMB, which represents landlords in leased pubs, criticised Punch for its "private equity-inspired" spending spree.

GMB national officer Paul Maloney said: "Yet again it is the tied tenants and their customers and the communities they serve that are going to suffer as this is not a real solution. If Punch admits trade in pubs is in decline then how does it expect the remaining 3,000 pubs to stay open and be profitable?"

The Campaign for Real Ale (Camra) said it was seeking more details from Punch on its plans, so that pubs are not closed unnecessarily. Head of public affairs Jonathan Mail added: "Camra hopes this proposed selling off will provide the chance for free traders, small brewers and small pub companies to acquire pubs and invest in them."

City analysts broadly welcomed the scheme, with Punch's shares closing up 2.3 per cent or 1.7p at 75.25p.Richard Curr, head of dealing at Prime Markets, said: "The decision is a bold one, but the market clearly approves and the move marks an impressive start for Ian Dyson."

But Paul Hickman, an analyst at Peel Hunt, downgraded Punch from "buy" to "hold" and warned: "The proposed de-merger is less favourable to equity shareholders than we would have assumed."