Alternative debt restructure proposals for Punch Taverns are being drawn up by representatives of the pub group’s bondholders, according to The Telegraph.
The newspaper reports that Rothschild, which is advising the Association of British Insurers’ (ABI) committee representing bondholders, 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 Telegraph quotes a source saying that the alternative deal has a “broad base of support from senior and junior lender groups across the different classes of debt”. The source added that the deal could be implemented even if Punch decides to stop supporting the debt vehicles and one or both of them go into default.
Yesterday Punch executive chairman Stephen Billingham issued a statement saying the next few days will be some of the most important in the company’s history as it nears the date (Friday 14 February) when noteholders vote on the restructure proposals.
Last week a group representing Punch Taverns noteholders, under the auspices of the ABI, said it unable to support the restructure proposals.
Billingham said yesterday: “The next few days will be some of the most important in the company’s history. The Punch board calls on all parties to vote in favour of the restructuring proposals.
“It is well known that certain creditors with blocking stakes have said they do not support the proposals. There are also other creditors with conflicting views who have blocking stakes. We have tried to listen to everyone and find a middle way. While it is not possible to accommodate all of the conflicting views, Punch has attempted over a 14 month period of engagement and at significant financial cost and management time to find a balance between these conflicting views.
“The restructuring proposals incorporate a significant number of stakeholder requests, as set out on 15 January 2014. The proposals would deliver a capital structure with material deleveraging of senior notes, and enhanced junior note PIK interest. Although they would result in debt to EBITDA of c.9 times and an interest expense of c9% per annum, which is at the upper limit for a pub securitisation, the board believes that they would provide a stable capital structure.
“The board believes that the restructuring proposals deliver more value for all Noteholders than default. Everyone has something to gain by voting for the proposals.”
