ABI threatens to derail Punch’s debt proposals

A POWERFUL investor representative body has threatened to derail Punch Taverns’ debt restructuring plans, just two days after the pub landlord appeared to be moving closer to reaching an agreement.

The Association of British Insurers (ABI) said yesterday that the new plans “[remain] some distance away from proposals that could be acceptable to us”. It said that Monday’s announcement, which proposed to offer more cash to senior lenders after separate plans were rejected earlier in the year, “is vague and is not a fully formed proposal capable of being considered”.

The announcement comes as a significant blow to Punch Taverns, which has built up a £2.4bn debt mountain, since the ABI says the lenders it represents have the power to block the restructuring plans. The ABI claimed it had not been properly consulted over the proposals.

When announcing the plans, Punch boss Stephen Billingham appeared confident, saying they “reflect the results of an extensive process with stakeholders” and that they present an “equitable solution” to lenders.

Punch Taverns has built up the debt pile due to an acquisition spree in the last few years, and has been selling off many of its pubs as it services the debt.

Billingham hit back at the ABI yesterday, claiming the proposals are “capable of delivering a good solution for all stakeholders,” and that Punch would work on winning the ABI’s support.



WITH Punch Taverns’ complex two-tiered debt far outweighing its annual revenues, the company has turned to some of the City’s top restructuring experts to help it find a solution.

Both Goldman Sachs and Blackstone Group bigwigs are working on restructuring the £2.4bn debt pile, with the company not expecting to pay off the money for over 20 years. Andrew Wilkinson, Goldman Sachs’ co-head of European Restructuring is taking the lead from Goldman’s side, supported by Sarah Mook, who was made a managing director last year. Wilkinson, a law graduate from Jesus College, Oxford, joined Goldman in 2007 as managing director and took up his current position the following year. He had previously worked for law firm Cadwalader and before that for Clifford Chance, where he worked on several large-scale corporate restructuring products.

Martin Gudgeon, the head of Blackstone’s European restructuring and reorganisation division, is leading the Blackstone team acting as financial advisers to Punch. Gudgeon joined the company in 2007 after being head of advisory and restructuring at Close Brothers.

He is joined by David Riddell, a senior managing director in the restructuring division.