STRUGGLING pub operator Punch Taverns has breached its debt obligations relating to part of its £2.3bn debt mountain, the company said yesterday.
Punch’s debt structure is complex and split into two securitised vehicles. Punch A holds £1.45bn of gross debt, while Punch B holds £884m. The firm breached a debt covenant related to Punch A in the quarter ended 1 March.
The company said negotiations with its bondholders are ongoing and a restructuring was still in the best interests of all parties.
“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,” said executive chairman Stephen Billingham. Punch also reported a loss of £119.7m during the 28 weeks to 1 March, wider than its £13.3m loss for the same period last year.
Punch’s shares fell 5.66 per cent on the news to 12.5p yesterday.