Punch Taverns Share Discussion Threads

[scburbs] 09/1/2014 13:07

Nothing in it for shareholders (max 4% EBITDA to meet running costs coming out of securitisations) until they have repaid the notes in 2029!

The only realistic equity play is to continue paying down the debt until they can refinance it to remove the cash trap restrictions. The senior debt (£1bn) would have a gilt + 1% discount rate voluntary prepayment fee. This would make refinancing prohibitive until either they have made substantial normal prepayments at par from cashflow or interest rates have gone up.

I would need to have a look at how quickly the senior would amortise from cashflow, but I think shareholders would be holding a non-yielding asset play for a minimum of 5 years (3 years at the very earliest if they were prepared to incur a large senior break cost). A very substantial discount to TNAV would still be required to encourage anyone to want to hold such an investment. How much of a discount would be reasonable would need rather more thought!

If I had a choice of where to invest, I think the 2027 7.274% A1 notes at 105% of par (the offer being made to those noteholders) would make a very good investment - especially in a tax free wrapper.

[scburbs] 09/1/2014 12:21

Bondholders should compromise as in a meltdown scenarios, the junior tranches would not payout due to costs of liquidation and discounts on forced disposals. If I remember rightly the complaints on the earlier restructuring were primarily from senior bond holders who would be paid out at par in a wind up (hence the 105% buy out offer to sweet the deal for them, i.e. better than a wind up).

If the restructuring goes through the senior bond holders look to be in a good position (i.e. not bad to have a safeish 7% yield). The junior bond holders would have taken a bit of a kicking in the restructuring, but that would have happened in a meltdown anyway and the company pitch is that the pain is less than would happen in a wind up.

Also the fact that the derivative liabilities would crystallise straight away in a wind up is another reason why junior bondholders would lose out more in a wind up.

[jeffian] 09/1/2014 10:55

In broad figures, the company has something like £2.4bn of property assets secured against £2.3bn debt. The balance sheet shows total net assets of around £300m, but most of that is 'goodwill' so let's say there's around £100m left for shareholders = around 15p/share. It's a mystery to me why bondholders would compromise at all - why should they? - but the play is that any haircut by bondholders would benefit shareholders significantly at the current price. Mr Bluesky may well have called it right, but it's too much of a gamble for me.

[scburbs] 09/1/2014 10:18

Jeffian,

Totally agree, currently a bet not an investment subject to the result of the vote. The share price move (along with the high volume) could be due to leaks on the likely result, but then again it may not as there could just be a lot of gamblers out there!

[jeffian] 09/1/2014 09:16

It's a straight play on the refinancing statement due by 15/1. Place your bets, ladies and gentlemen............

[deanroberthunt] 09/1/2014 09:06

needs to breakout and hold past 15.5p for this to be pukka.

[deanroberthunt] 09/1/2014 09:05

just me and thee kidda by the looks of it...

[mr_bluesky] 08/1/2014 20:30

dean:

Its the break out that I predicted.

[deanroberthunt] 08/1/2014 19:03

whats appening ere then?

[mr_bluesky] 06/1/2014 17:31

dean:

SPRT looks the best for percentage gains.

MAB which I missed out look good also and PUB if they get the debt sorted to the satisfaction of the share holder.

Mr Bluesky

[deanroberthunt] 06/1/2014 15:35

Bluesky

what's your best pick from those companies?

[deanroberthunt] 06/1/2014 15:35

look at the volume

[mr_bluesky] 06/1/2014 15:33

reminder:


Mr_BlueSky
4 Jan'14 - 11:04 - 1489 of 1499 0 0 edit




Time to top up take your first position IMO........

PUB:

Now at 12.75p having fallen un gracefully from 15.50p all the way to just under 9.50p looks to be close to a big upward move.

A break out from here for PUB should take it to test recent high of 15.50p and for the more cautious of us wait for 14p to be broken through and held to close the day for entry.

It is setting up a potential bull flag with MACD setting up my bullish pattern which comes before a big move up.

Infact with the world cup this summer PUB,JDW,MARS,SPRT and the like will make very good investments IMO.

Also DOM do very well in Euro/world cup years.

Mr Bluesky

[mr_bluesky] 06/1/2014 15:32

ping!
8% jump and there's the break out ;)

[deanroberthunt] 06/1/2014 13:46

the mini h&s says about 16-17p

[deanroberthunt] 06/1/2014 13:36

Mr Bluesky

what would be your target just from a charting viewpoint?

cheers

[deanroberthunt] 06/1/2014 13:35

can't see how it can survive in a format that will benefit shareholders....debt is way too much, 2.4bn, unbelievable....even YELL succumbed to the debt, and they had less with a much higher t/o and ebitda...

[mr_bluesky] 04/1/2014 19:43

thanks for the fundies btw.

Being mainly a chartist I tend to neglect the in depth side of things.

[jeffian] 04/1/2014 19:30

8-)

You probably will be.

[mr_bluesky] 04/1/2014 17:49

jeff:

Ok ok point taken.

I am not saying this is a long term investment I have picked up on a short term bullish pattern with a potential break out to come.

I may be sitting in a darkened room fundamentally but I am peeping out at the sun light streaming in briefly from behind the grey clouds.

We will see shortly if I am right wont we.

Mr Bluesky

[jeffian] 04/1/2014 14:49

Isn't that the problem with chartism? It's like trying to forecast the weather whilst sitting in a darkened room with the curtains drawn and refusing to look outside.

The "fundamentals" for PUB are that it has an unsustainable debt structure which will lead to its collapse if not renegotiated. Two previous attempts by PUB management have not been accepted by the bondholders and the "final" proposals are to be submitted before 15 January.

They will then have to be voted on so the outcome is far from certain at this stage. Of course, as institutions prefer certainties to the unknown consequences of debt default, the odds must be on a deal being reached and I expect your charts are reflecting that as the 15 January deadline approaches, but the risk still remains and, until we see the form of the final deal, the residual value (if any) for shareholders is unquantifiable.

Some time ago, another chartist started a thread on Surrey Free Inns (SUF) claiming it was "oversold". As it turned out, it was simply on its way to the knacker's yard, which was entirely foreseeable based on any study of the "fundamentals".

(My counter-argument started at post #34 et seq)

[mr_bluesky] 04/1/2014 13:59

jeff:

My observations are based purely on charts and are for the short term movement.

I know little about the fundamentals for PUB.

Mr Bluesky

[jeffian] 04/1/2014 13:13

Mr_BlueSky,

How confident are you that the financial restructuring will be achieved with any value left for shareholders or at all? Since the bondholders have the security of a charge over the assets, it's a mystery to me why they would accept anything less than they are owed, leaving little or nothing for shareholders. Even the threat of PUB insolvency wouldn't concern then as they could easily get one of the other pubco's to manage the estate for them.

It probably will get sorted out but your post does not seem to recognise any risk.

[mr_bluesky] 04/1/2014 11:04

Time to top up take your first position IMO........

PUB:

Now at 12.75p having fallen un gracefully from 15.50p all the way to just under 9.50p looks to be close to a big upward move.

A break out from here for PUB should take it to test recent high of 15.50p and for the more cautious of us wait for 14p to be broken through and held to close the day for entry.

It is setting up a potential bull flag with MACD setting up my bullish pattern which comes before a big move up.

Infact with the world cup this summer PUB,JDW,MARS,SPRT and the like will make very good investments IMO.

Also DOM do very well in Euro/world cup years.

Mr Bluesky

[deanroberthunt] 03/1/2014 12:03

quiet on here of late...anyone got a view on recent events?