A group representing senior bondholders of Punch Taverns has urged creditors to support its alternative restructure proposals, which it says is “well advanced amongst creditor groups”.
Punch this morning said it had withdrawn its proposed debt restructuring proposals that were to be put to its creditors on Friday (14 February) “following feedback from a range of stakeholders”.
Following the announcement, a source close to the Association of British Insurers (ABI) Senior Bondholder Committee said: “Punch PLC has wasted the last two months trying to get their shareholder friendly deal to stick, whilst talking-up the risk of default. So it is time for the boards of the borrowers, Punch A and B, to step forward to conclude the alternative deal that has support from a broad base of creditors.
“The senior bondholder committee was formed in December 2010, and has been seeking engagement with Punch ever since. Punch finally engaged in substantive discussions in September 2013, and published headline deal terms on 9 December 2013.
“So ‘14 months of engagement’ [as stated by Punch] was actually barely three, followed by two months of trying to drive through their shareholder deal. The ABI Senior Bondholder Committee has consistently made itself available for negotiations, and this remains the case today.”
On 6 February the Daily Telegraph reported that Rothschild, which is advising the ABI committee, is putting together alternative restructuring proposals along with advisers at Moelis & Company and Lazard; Moelis is advising Angelo Gordon, the hedge fund investor, while Lazard is working with Warwick Capital.
The source said: “The process to date has been a shareholder-led attempt to get a deal to stick that is great for shareholders, but doesn’t work. Punch PLC, which is the shareholder vehicle, has been trying to be seen as a neutral arbiter ‘finding a middle way’, but it is pure and simple the shareholders’ representative.”
“Punch A and Punch B have about £200m of cash and have been offered lenders’ support. There is no reason for these companies to get in to mess or uncertainty.
“An alternative restructuring plan is well advanced amongst creditor groups, and the next step is for the Punch A & B boards to engage in discussions directly with their creditors to finalise it.”
“The creditor plan can be implemented after a default if necessary – but a default is entirely avoidable.”
