Greene King swoops on 11 Punch pubs

EMBATTLED pub group Punch Taverns yesterday disposed of 11 pubs in a &pound;30m deal with rival firm Greene King.<br /><br />The acquisition comes after Greene King raised &pound;207m from shareholders to take advantage of cut-price assets in the pub sector. The 11 pubs generated earnings before interest and tax of &pound;3.55m in the year to end August last year. <br /><br />Greene King chief executive Rooney Anand said: &ldquo;I am really pleased we have been able to acquire these high quality assets, further strengthening our presence in two key geographies for us. They also match the criteria we set out when announcing our recent rights issue.&rdquo;<br /><br />Punch Taverns has been dumping a string of pubs to tackle its &pound;5bn debt mountain. So far this year the group has raised &pound;120m by selling 161 pubs to rivals Adnams, and Fuller, Smith and Turner. Analysts believe that this recent &pound;30m deal will allow the company to pay down around &pound;50m of debt.<br /><br />Punch Taverns chief executive Giles Thorley said: &ldquo;This transaction is in line with our stated strategy of increasing free cash flow and reducing the overall level of our debt.&rdquo;<br /><br />Since last year Punch Taverns has reduced gross debt by &pound;318m, at a cost of &pound;203m, helped by a decision to scrap its dividend.<br /><br />Yesterday Punch shares dipped by 1.1 per cent to 155p while Greene King shares lifted by 1.3 per cent to 421.25p.<br /><br />Seven of the pubs are in London, including Bunch of Grapes, next to the Harrods store in Knightsbridge. The other four are in Scotland and the South East.