Punch Taverns restructuring talks ongoing; 'pre-pack' not an option

By Caroline Salls

Pittsburgh, April 18 - Punch Taverns plc said restructuring talks are ongoing following an April 17 meeting of significant stakeholders and their advisers held to discuss the restructuring proposal made by the company on Feb. 7.

According to a company news release, a wide range of views was expressed at the meeting, including the feasibility of a "pre-pack administrative receivership" of one or both of Punch Taverns' securitizations.

However, Punch said it reiterated that a pre-pack cannot be executed and is not in the interests of stakeholders as a whole, and the company's board cannot support that option.

In addition to the pre-pack, Punch told the stakeholders that restructuring options it reviewed included separation of the Punch A and Punch B securitizations, which would result in loss of synergies and operational disruption and be value destructive; debt conversion or raising new equity, which was determined to be not feasible; accelerated asset disposal, which was determined to be value destructive and does not improve leverage; and covenant resets, which, alone, would not reduce debt service obligations.

The company said some stakeholders previously expressed their lack of support for the current restructuring proposal terms and these views were reiterated in the meeting.

Punch said views were expressed at the meeting that provide a basis for further discussion with stakeholders.

The company said its board believes a restructuring can still be launched in the first half of 2013.

Punch Taverns is a pub company based in Burton on Trent, England.

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