Lenders urged to accept deal on restructuring Punch’s £2.3bn debt

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PUBS group Punch Taverns has urged its lenders to swallow a controversial restructuring deal to slash its £2.3bn debt mountain or face default.

Executive chairman Stephen Billingham said the business, which has around 4,000 leased and tenanted pubs, would face uncertainty if the plans are not accepted at a vote on February 14.

It has already been rejected by several groups of bondholders with blocking stakes, who are pressing for talks to be reopened.

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

He said: “The next few days will be some of the most important in the company’s history. Everyone has something to gain by voting for the proposal.

“Failure to effect a restructuring will lead to a default in the securitisation, which is expected to have a material negative impact on the business.

“Punch has a very good underlying business with a positive future and its assets provide a focal point for 4,000 communities across the UK.

“Just as Punch’s operational performance is turning the corner, the last thing the business needs is for continued uncertainty.”

The group last month published its final proposal to restructure debt and avoid a default, but bondholders who oppose the deal are thought to believe it has been skewed in the interest of Punch’s shareholders.

However Mr Billingham told the Daily Telegraph there would be a “mess” if it were not passed, adding: “I have real concerns that nobody has an alternative out there that is realistic or sensible.”

Last month, Punch Taverns said its programme of pub disposals was likely to take longer than expected due to improved trading at its non-core estate, with average profit per pub now down by five per cent on a year ago.

The division’s 1,106 pubs bring in 18 per cent of sales.

Punch Taverns was founded in 1997, and has grown its portfolio of around 4,300 pubs to lease nationwide.

Punch Taverns also provides a range of business support services, covering everything from marketing to the legal and financial aspects of running a pub.

Altogether, it has 568 pubs in Yorkshire.