Punch Pub Landlords Fight For Voice

3 Feb 2014

Furious landlords at battered pubs group Punch Taverns are demanding they are included in discussions about the future of the debt-laden company as a crucial vote looms to decide its future.

An activist landlord is organising a tenants’ campaign group to bypass the company and work directly with its creditors. The aim is to hatch a deal to help protect the pubs if the group is forced into administration.

Punch, Britain’s second-largest pubs operator with around 4,000 premises, has been engaged in a 14-month battle with lenders over a proposed restructuring. Over ambitious expansion plans during the boom years left it with a massive £2.3billion debt pile and it urgently needs to renegotiate its loans.

Next Friday, 16 classes of lenders – each representing a different type of bond issued by the group during its borrowing spree – will vote on the latest proposal from the board, which needs the backing of 75 per cent of votes cast if it is to succeed. If the plans are voted down, then Punch is likely to default on its interest repayments and administrative receivers would be called in. Angry tenants say that they have been left out of the negotiations and that some were ‘worried sick’ about losing their livelihoods and the deposits they have paid to Punch to become landlords.

Landlord and former management consultant Chris Lindesay of the Sun Inn in Dunsfold, Surrey, is co-ordinating a tenants’ group with a view to working directly with bondholders to keep the company going after administrators are called in. ‘Tenants are terrified about what’s going to happen and the whole thing has been a farrago,’ he said.  ‘They’ve got to start unwinding the company. The board’s proposals are just going to give money to US vulture funds.’

Steve Kemp, the GMB union officer for tenants at tied pubs, said: ‘Neither the shareholders nor the bondholders has listened to the tenants so far, but the administrators would take a different view.’

However, both sides claimed that the tenants were their priority. A Punch source said: ‘Uncertainty is not helpful for the tenants, and after the restructuring, more cash will be available for them,’ whereas a representative of the senior bondholders said the pubs would suffer more from being shackled by debt.

Read more: http://www.dailymail.co.uk/money/markets/article-2550090/Dont-bar-Pub-landlords-fight-voice-Punch-Taverns-crisis-talks.html#ixzz2sGVAHn52

Source: Financial Mail On Sunday 2/2/14