Punch feels the pinch and embarks upon debt management
Punch feels the pinch and embarks upon debt management
Monday 15th June 2009
Most of the money generated by the share placing will be used to purchase £275 million of convertible bonds due for repayment by December 2010.
Giles Thorley, Punch Taverns chief executive, said: "The announcements are a clear sign to the market, our partners, our customers and our employees of Punch's ability and determination to move beyond the current challenging market conditions."
The chain has admitted that without the money generated though the share placing, it would quite likely be unable to pay for the £275 million of convertible bonds.
In order to finance its debt the company began taking action, which included selling certain assets, at the start of the year.
According to the Daily Telegraph, more than 300 properties were sold for £171 million and dividend payments were cancelled.
As a result the organisations gross debt fell to £404 million. However, the company remains cautious.
In a statement the company statement said: "While we are confident of the longer term prospects for the group and our expectations for the full year remain unchanged, we remain very cautious over the near-term due to the lack of forward visibility on trading outlook."
Punch Taverns, which owns about 8,000 pubs around the country, owes close to £4.5 billion.
New shares will be issued at a price determined by the market and remain on sale for the duration of today (June 15th) until 4.30pm.
News article brought to you by Debt1 – UK debt management specialists.
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