Punch Taverns Share Discussion Threads

[jeffian] 11/8/2014 09:53

Talk about taking it to the wire!

"These waivers are subject to various conditions, including that a restructuring implementing the proposals announced by the Company on 26 June 2014 is launched by 11 August 2014. This condition is subject to a cure period of up to 10 business days.

Punch announces that the launch of the restructuring has been delayed...."

[timbo003] 04/6/2014 06:03

Government response to consultation (and legislation proposals for Queen's speech):



Vince cable comments:

[jeffian] 01/6/2014 14:53

As if they hadn't got enough to worry about already........

Although there was a growing feeling that the issue of a 'statutory code' governing relations between the pubco's and their tenants had been kicked into the long grass - - stories in the Sunday press (I've seen the Times and Telegraph) suggest that this is going to be slipped into the Queen's Speech for legislation in the coming Parliamentary session, although in each case the reference is hidden away in stories about other issues. They do say that the proposals are unlikely to attack the "tie" itself (the requirement for tenants to buy beer and other supplies from the owners of the property) but there are two other contentious issues which remain to be seen. Firstly, one of the conclusions of the Parliamentary Committee considering the issue was that a 'tied' tenant should be 'no worse off' financially than a free-of-tie tenant. Secondly, campaigners have been trying to get the 'right' for tenants to change their existing tenancies from 'tied' to 'free' subject to negotiating an 'open market rent'. Bearing in mind that over 50% of gross profit at ETI (and presumably PUB) comes from the wholesale profit on selling beer, wines, spirits and minerals and something under half comes directly from rent, the issue raises considerable uncertainty.

All eyes on the Queen's Speech this week then!

[scburbs] 27/5/2014 08:16

Proposed debt to equity swaps at 7.62p and £50m new raise at 3.81p.

Main meal is reversed for those at the table.

(i) Alchemy Partners LLP
(ii) Avenue Europe Management LLP
(iii) Angelo Gordon Europe LLP
(iv) Glenview Capital Management LLC
(v) Luxor Capital Group LP
(vi) Oaktree Capital Management (UK) LLP
(vii) Warwick Capital Partners LLP

[timbo003] 27/5/2014 08:15

Correction, I now make that 10.6p/share

Given there are currently 665 million shares

I maybe wrong

Lets see what the market thinks

[timbo003] 27/5/2014 08:03

£600M for 85% of the equity, so that values the existing equity at around £106M.

Is that too simplistic?

[timbo003] 27/5/2014 07:58

On first read, it sounds like a nasty hair cut for shareholders to me:




The Proposals differ in a number of ways from the terms of the restructuring launched by Punch on 15 January 2014. In particular, junior notes in Punch A and Punch B would be exchanged for a combination of not only cash and new junior notes, but also ordinary shares in the Company in a debt-for-equity swap. In addition, a group of junior creditors would subscribe for ordinary shares in the Company at a significant discount to the current market price to raise additional funds to be applied to repay junior notes in the Punch A securitisation.

The Proposals would result in a reduction in total net debt (including the mark-to-market on interest rate swaps) of £0.6 billion. In consideration for the debt reduction, the debt-for-equity swap and placing contemplated by the Proposals would result in significant equity dilution for existing shareholders, such that the Company's currently issued share capital would represent 15% of its total enlarged issued share capital following the restructuring.

Were the Proposals to be implemented, the reduction in net debt (including the mark-to-market on interest rate swaps) of £0.6 billion would result in the pro forma net debt to EBITDA leverage of the Punch group falling to c.7.7x1 at August 2014. Gross securitisation debt of £1,582 million would have an effective interest rate of c.7.9% including PIK interest (c.7.1% cash pay interest).


Any decision by the Board to recommend a proposal involving dilution of existing shareholders would need to be carefully considered in terms of the value which it represents for existing shareholders.

Implementation of the Proposals, or any consensual restructuring involving a significant equity component, results in additional execution complexity. Accordingly, the Board is of the view that it will not be possible to launch the Proposals, or any consensual restructuring involving a significant equity component, prior to the deadline of 30 June 2014 included in the covenant waivers obtained by Punch A and Punch B on 13 May 2014. It is, therefore, likely that Punch A and Punch B will require an extension to the covenant waivers to provide sufficient time to implement a consensual restructuring and Punch will provide further details of any such extension in due course.

[jeffian] 01/5/2014 09:32

I think it was a foregone conclusion based on reports that the bondholders had indicated their approval beforehand, but the big issue for shareholders remains the question of how much equity will be left after the bondholders take their slice?

[the troll] 30/4/2014 17:22

OK, got it.

[the troll] 29/4/2014 17:22

interesting; the note-holders decisions at today's meetings must be known to them, but no RNS ?

[jeffian] 26/3/2014 21:41

"it is in the interests of all parties to agree a consensual restructuring ahead of the next covenant reporting date of 15 April 2014"

Tick! Tock!

[scburbs] 17/2/2014 14:05

Monomono,

No. It is odd that such a price sensitive issue does not seem to require an RNS!

The share price has held up remarkably well to the collapse of the negotiations! If I was holding I would be selling, although I am not currently planning to short it.

A longer article is in the FT.

"Now Punch's bondholders, advised by Rothschild, Lazards and Moelis, have rejected Mr Billingham's proposals in favour of a scheme centred round just such a debt-for-equity swap.

Shareholders may not like their stakes being diluted and they can vote against it. But they must know that the road from here leads to insolvency."

[monomono] 17/2/2014 13:55

Scburbs - do you happen to have a link to an announcement?

Thanks
MM

[timbo003] 17/2/2014 11:36

scburbs, thanks for that

I have always thought that a debt for equity swap would be the most likely outcome. If you were a debt holder, would you be prepared to settle for anything less? I certainly wouldn't! Chartists and tea leaf readers, may of course disagree.

[scburbs] 17/2/2014 11:11

"A new plan to restructure Punch Tavern's £2.3bn debt pile has been submitted following the last-minute collapse of the pub group's initial proposal.

The new plan is expected to be based on a debt-for-equity swap, with the operating company and two property companies structure remaining in place."

Source: EGi

[jeffian] 28/1/2014 14:08

I'm sure there is an element of brinkmanship about all this and it will probably be sorted out, but the risk remains.

[jeffian] 22/1/2014 19:30

It ain't a done deal yet. Note the conclusion - 75%+ approval required failing which the administrators will be called in.

Good luck.

[mreasygoing] 10/1/2014 15:36

If it does breakout there is blue sky to 60p Mr B ! I am watching with interest.

[mr_bluesky] 10/1/2014 15:24

I see my predicted break out is in full swing still.

Recent high being tested now.

Mr Bluesky

[john168] 10/1/2014 06:39

This company can be considered as a business properties to let as well. Trading certainly has improved recently, anyone go to pub must notice that. The company has over £300m cash pile, a program of disposing 1000 non-core pubs to reduce the debts and a program of debts and shares buy back. No doubt that some greedy wants to grab these properties.
Company's doctor Stephen Billingham certainly doing the right thing.
Numis position on this company is hold.