Punch warns of ‘negative impact’ if bond deal fails

Pubs operator Punch Taverns today made a last-ditch plea to its bondholders to approve the company’s debt restructuring.

The firm, which has about 4,000 venues across the UK, warned it would default on its bonds if the restructuring is not approved at a meet next week, and this would have a “material negative impact” on the business.

Executive chairman Stephen Billingham said: “The next few days will be some of the most important in the company’s history. The Punch board calls on all parties to vote in favour of the restructuring proposals.

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“It is well known that certain creditors with blocking stakes have said they do not support the proposals. There are also other creditors with conflicting views who have blocking stakes. We have tried to listen to everyone and find a middle way.”

Punch has a complex £2.3 billion debt pile, built up during an acquisition spree over the past decade, and has been in talks with lenders for the past 14 months to overhaul its borrowings.

One bondholder, who asked not be named, said: “The deal on the table 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.”

But Billingham added: “The restructuring would provide certainty and stability for the business from which all stakeholders will benefit. In the next few days stakeholders have it in their hands to vote in favour of the restructuring proposals to end this uncertainty.”