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Wed 17th Sep 2014 - Punch debt restructure gets stakeholder green light
Punch debt restructure gets stakeholder green light: Punch Taverns shareholders and bondholders have both today approved debt restructuring proposals that will see a debt for equity swap – they were passed by noteholders at each of 16 noteholder meetings. Following today’s shareholder and noteholder approvals, completion of the restructuring remains subject to the consent of The Royal Bank of Scotland (a liquidity facility provider to the Punch A and Punch B securitisations and provider of hedging arrangements to the Punch A securitisation) and Lloyds Bank (a liquidity facility provider to the Punch A securitisation). Punch is continuing the process of obtaining the consent of these creditors. Subject to the successful receipt of these consents, it is expected that the closing date of the restructuring will be 8 October 2014. The proposed share capital consolidation is now expected to become effective on 13 October 2014. Stephen Billingham, executive chairman of Punch Taverns, said: “We are delighted the resolutions have been passed by our noteholders and shareholders today. This has been a long and complex process and reflects an enormous amount of work that has been required by all parties. We have now entered into the final stage of the restructuring process and look forward to completion on 8 October following the receipt of outstanding consents.” The debt restructure will see bondholders undertake a debt for equity swap and existing shareholders’ stake reduce to 15% of the new enlarged share capital. Making the case for the restructure earlier this year Punch stated: “The Group’s existing debt structure is unsustainable, with total net debt leverage of 10.8 times Ebitda. Leverage would be expected to increase following a default, absent a restructuring, and this would be expected to have material adverse consequences for all stakeholders and, in particular, for shareholders, given the various financial and contractual linkages between the securitisations and the rest of the Punch Group. The board believes that the proposals will create a more robust and sustainable debt structure for the Punch Group, with the reduction of total net debt (including the mark-to-market on interest rate swaps) by £0.6 billion, and the consolidated net debt to Ebitda leverage ratio of the Punch Group falling to circa 7.7x. Gross securitisation debt of £1,585 million at closing will have an initial effective interest rate of circa 7.8% including PIK interest (circa 7.1% cash pay interest).”

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