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Punch Taverns breaks debt obligations

Pub chain Punch Taverns in negotiations to restructure debt

TROUBLED pub chain Punch Taverns has breached its debt obligations, the company said in an announcement to the market.

Punch’s £2.3bn debt pile is split into two securitised vehicles. Punch A holds £1.45bn of gross debt, while Punch B carries £884m. The landlord breached a covenant relating to Punch A in the quarter ending 1 March.

The pub added it is in negotiations with its bondholders and in the interests of all parties, it would look to restructure.

In a separate announcement, it added Punch B runs a “significant risk” of breaching its covenants in the quarter ending 1 June.

Executive chairman Stephen Billingham said: “Proactive engagement on the restructuring discussions is continuing and we urge all stakeholders to support the covenant waiver requests to provide the business with stability and time to effect a consensual restructuring of the group’s financing arrangements.”

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