Capital Structure Update
Since the announcement of the restructuring proposals for the Group’s Punch A and Punch B securitisation structures on 7 February 2013 (the “Restructuring Proposal”), the Group has continued to engage with the many stakeholders who will need to support the Restructuring Proposal. As part of this process Punch convened a meeting on 17 April 2013 with a number of significant stakeholders and their advisers to discuss the Restructuring Proposal and the feedback received by Punch from stakeholders since 7 February 2013.
A wide range of views was expressed at the meeting, including the feasibility of a pre-pack administrative receivership of one or both of the securitisations to effect a restructuring. Punch has reiterated that a pre-pack cannot be executed, is not in the interests of stakeholders as a whole and the Board cannot support such an option.
Some stakeholders had previously expressed their lack of support for the current terms of the Restructuring Proposal and these views were reiterated in the meeting. However, whilst it was not anticipated that agreement would be reached at the meeting, views were expressed that provide a basis for further discussion with stakeholders around the Restructuring Proposal. These discussions are ongoing.
The Board continues to believe that a consensual restructuring is in the best interests of all stakeholders and that a restructuring can be launched in the first half of 2013.
A full copy of the presentation provided to stakeholders at the meeting is available on the Punch website. This presentation includes the following information:
A recent external desktop property valuation undertaken by independent valuers, GVA, has indicated a current value of the core and non-core pub estates to be £1,415 million and £906 million for the Punch A and Punch B securitisation estates respectively. This compares to net debt of £1,366 million and £835 million as at 2 March 2013 for the Punch A and Punch B securitisations respectively;
An analysis of the anticipated ratio of net debt to EBITDA in 2018 indicates that the Restructuring Proposal would reduce this ratio by approximately 3 times in the Punch A securitisation and approximately 5 times in the Punch B securitisation compared to a scenario in which a consensual restructuring was not effected and the business plan implemented by an Administrative Receiver following a covenant default; and
A summary setting out feedback received from stakeholders since the announcement of the Restructuring Proposal and Punch’s comments on that feedback. To the extent that this feedback is consistent with the form of the Restructuring Proposal, it is being discussed with stakeholders with a view to determining whether consensus can be achieved. However, as consensus is required across a broad range of stakeholders it is not possible to anticipate which, if any, of the suggested amendments may be made to the Restructuring Proposal.
18 April 2013
Enquiries:
Punch Taverns plc Tel: 01283 501 948
Stephen Billingham, Executive Chairman
Steve Dando, Finance Director
Restructuring:
Goldman Sachs International; Andrew Wilkinson, Sarah Mook Tel: 020 7774 1000
The Blackstone Group International Partners LLP; Martin Gudgeon, David Riddell Tel: 020 7451 4000
Media: Brunswick Tel: 020 7404 5959
Jonathan Glass, Sophie Brand