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Punch's cash call scrapes over line
Embattled pub group Punch Taverns saw its £375m investor cash call scrape through yesterday after nearly 40 million votes were lodged against the move.
Punch, which is raising the money to help meet repayments on a 4.4bn debt mountain, received 75.1 per cent of votes in favour of its share placing – just nudging past the 75 per cent required.
It is thought that two hedge fund investors were among those that opted not to back the fundraising in protest at the dilution effect on shares and the strategy to use the share placing to reduce debts.
Punch plans to use the proceeds to repay debts after warning on announcing the fundraising last month that it may otherwise be unable to meet some repayments falling due.
The group has been whittling down its debts, paying off 404m – 8 per cent of the total – since the start of its financial year.
It has sold off non-core pubs to help pay down debts, recently announcing the sale of 11 pubs to rival Greene King for 30.4m.
It has also said it will continue to look at asset sales and ways to cut costs to improve cash flow and ease its debt burden, but it hopes the share placing will avoid the need to offload core pubs at unattractive prices.
Around 55 per cent of Punch's shareholder register voted on the placing resolution, with 60 institutions giving their assent.
The bulk of the votes cast against are believed to have been lodged by US private equity vehicles QVT and Greenlight.
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Sunday 12 February 2012
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