Punch Taverns PLC Capital Structure Update (1177S)
November 04 2013 - 7:01AM
UK Regulatory
TIDMPUB
RNS Number : 1177S
Punch Taverns PLC
04 November 2013
4 November 2013
Punch Taverns plc ("Punch")
Capital Structure Update
Progress since 25 September 2013
Since the announcement of Punch's preliminary results on 25
September 2013, Punch has continued to engage in extensive
discussions with stakeholders and their advisers from across the
Punch A and Punch B securitisations (including the advisers to the
ABI Special Committee of noteholders), with the objective of
reaching agreement on the terms of a consensual restructuring for
both securitisation structures.
Given the nature of the securitisation structures and the
differing interests across many of the stakeholder classes, a
number of conflicting stakeholder views have been received across a
broad range of topics during the engagement process from both
noteholders and other securitisation creditors.
In response to the proposals announced by Punch on 10 June 2013,
certain senior creditors have requested that a greater proportion
of the available cash resources is allocated to senior creditors
(in the case of senior noteholders based on fixed note amortisation
schedules) with junior creditors receiving a mixture of reinstated
PIK notes, cash and equity. These proposals from certain senior
creditors are inconsistent with the request from certain junior
creditors that value is allocated to the junior notes in
recognition of their ability to benefit from the ongoing cashflows
and liquidity facilities within the securitisation structures
notwithstanding default and are inconsistent with the position of
shareholders who are unwilling to contemplate dilution.
While these requests conflict with each other, Punch is
continuing to work with stakeholders with the objective of helping
all parties move towards a restructuring proposal that can be
supported by stakeholders. Punch will announce a revised
restructuring proposal during the first week of December 2013 with
the broadest level of support achievable at that time and will then
formally launch the implementation of that restructuring proposal
shortly thereafter.
Financial support and potential default
Failure to achieve a consensual restructuring of both
securitisations would, in the Board's opinion, give rise to the
risk of material dissynergies across the two securitisations and
the wider Punch group and disruption to the business. As a result,
it is in the interests of all parties to agree a consensual
restructuring to avoid such dissynergies and disruption and to put
in place a sustainable long-term capital structure for the
securitisations.
As previously announced, the securitisations continue to require
financial support to maintain compliance with their DSCR covenants
and the provision of such support to the securitisations by the
Punch group remains under ongoing review. Such financial support
could involve the use of cash resources held outside the
securitisations to lower the cost of drinks supplied to the
securitisations or other actions available to management to avoid a
covenant default in the relevant securitisation, including the
repurchase and cancellation of securitisation debt at a
discount.
Current trading
Trading performance in the first eight weeks of the current
financial year has been in line with management's expectations and
a further update will be provided on 27 November 2013 when Punch is
scheduled to announce its Q1 Interim Management Statement.
Enquiries: Tel: 01283 501
948
Punch Taverns plc
Stephen Billingham, Executive Chairman
Steve Dando, Finance Director
Restructuring:
Goldman Sachs International Tel: 020 7774
Andrew Wilkinson 1000
Sarah Mook
The Blackstone Group International Partners Tel: 020 7451
LLP 4000
Martin Gudgeon
David Riddell
Media: Brunswick Tel: 020 7404
5959
Jonathan Glass, Mike Smith
Goldman Sachs International, which is authorised by the
Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority in the
United Kingdom, is acting as financial adviser to Punch and for no
one else in connection with the capital structure review and will
not be responsible to anyone other than Punch for providing the
protections afforded to clients of Goldman Sachs International nor
for providing advice in connection with the capital structure
review, the content of this announcement or any matter referred to
herein.
The Blackstone Group International Partners LLP, which is
authorised and regulated by the Financial Conduct Authority in the
United Kingdom, is acting as financial adviser to Punch and for no
one else in connection with the capital structure review and will
not be responsible to anyone other than Punch for providing the
protections afforded to clients of The Blackstone Group
International Partners LLP nor for providing advice in connection
with the capital structure review, the content of this announcement
or any matter referred to herein.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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