Punch Taverns has said it 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.
The company said that 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.
It said that in response to the restructure proposals it announced in June, 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.
The company said: “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.”
At the same time, the group said that its trading performance in the first eight weeks of the current financial year had been in line with management’s expectations.
The company reiterated its stance that failure to achieve a consensual restructuring of both securitisations would, in its opinion, give rise to the risk of material dissynergies across the two securitisations and the wider group and disruption to the business.
It said: “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.
The company said: “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.”
