Could Punch default on loans?

12/12/2010

The Sunday Times reported today that Punch TavernsĀ is considering defaulting on loans on more than 5,000 pubs to force bondholders to take possession of the pubs or allow the company to take them back on improved terms.

Punch has about 3.1 billion pound of debt secured against its pub estate. About 2.6 billion of this amount is backed by its tenanted pubs that are run by publicans who pay Punch rent and rely on them for beer supplies.

The company could not be reached for comment.

In November, the paper reported that Punch had hired Goldman Sachs and Blackstone to advise on a restructuring with a spin-off of the tenanted pubs division one option being considered.

Punch, Britain’s largest pubs group, is set to hold its annual general meeting on December 16.

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