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UPDATED: Punch restructuring plan rejected 12 June 2013

The special committee set up by the Association of British Insurers (ABI) to represent lenders of Punch Taverns has rejected the chain’s revised restructuring plan.

Punch Taverns Plc announced revised restructuring plans on Monday in a bid to reduce net debt of £2.4bn. Senior bondholders previously rejected an initial restructuring package in February.

A statement made today by the ABI special committee said the plans were “vague” and only a “marginal revision of the 7 February proposals and therefore remains some distance away from proposals that could be acceptable to us.”

“Although certain key terms remain to be clarified, the ABI Committee considers that it is unlikely that it will be able to support a proposal developed around the thinking described in the update.”

Stephen Billingham, executive chairman, said on Monday: “The revised restructuring proposals reflect the results of an extensive process with stakeholders.

“Importantly, these proposals achieve an equitable solution by directing more of the group’s finite cash resources to the senior classes of notes, whilst still providing good value recovery for the junior classes of notes.”

The revised restructuring plan includes a debt structure with next planned refinancing not until 2029, as well as reducing debt service repayments by £600m over a five year period.

A statement from the company said it expected the revised restructuring plan “will be supported by a broader group of stakeholders.” It also announced that the group is “on track to meet full year profit expectations”.

Punch Taverns, which was established in 1997 by Pizza Express’ Hugh Osmond, recently sold 246 of its owned pubs for £84m, ahead of book value.
The Punch Tavern group operates over 5,000 pubs across the UK, a figure that has dwindled from 7,000 during the economic downturn.



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