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Punch Taverns leaps on debt restructuring
SHARES in Punch Taverns rose by a fifth yesterday as the company said months of negotiations to restructure its colossal debt pile were nearing an end.
The company said it had strong support from many of its biggest shareholders and creditors for a new proposal over its £2.4bn debt pile. The new plans are set to cut debt servicing costs by almost £500m over the next five years.
Although Punch Taverns remains profitable, its debt – much of which is secured against the group’s assets have been a big concern for investors. Punch’s debt is made up of two instruments and payments towards them have weighed the company down.
The new plan would see £229m of Punch’s debt written off on one of the instruments, and deferred payments on the other.