Punch admits defeat in debt restructuring

Punch Taverns admitted defeat yesterday in its attempt to convince lenders to back a controversial plan for tackling its £2.3bn debt mountain.

Britain’s second biggest pub landlord, which has around 4,000 leased and tenanted pubs, caved in to opposition from the bondholders by agreeing to cancel a vote on the proposals due to take place tomorrow.

It will now reopen talks with lenders in a bid to achieve a “consensual restructuring” in the best interests of all stakeholders by mid April.

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In a last minute plea to bondholders last week, executive chairman Stephen Billingham warned the company faced uncertainty unless the restructuring proposals were accepted.

He said the company had spent 14 months trying to find a solution “to accommodate all of the conflicting views”.

There are 16 different classes of debt within Punch’s two property company subsidiaries. Some bondholder groups expressed concern that the existing proposals were skewed in favour of shareholders and would still leave the company heavily in debt.

Mr Billingham said in an interview with the Daily Telegraph last week that there would be a “mess” if the vote was not passed, adding: “I have real concerns that nobody has an alternative out there that is realistic or sensible.”

Punch Taverns was founded in 1997. Altogether, it has 568 pubs in Yorkshire.