Punch Taverns awaits crunch vote on future3rd February, 2014 by Lauren May
Thousands of UK pub landlords are anxiously awaiting a crucial vote on the future of debt-laden Punch Taverns in the hope that it will not slip into administration.
Punch Taverns, which operates around 4,000 pubs in the UK, has been in talks for the last 14-months with lenders over a proposed restructuring to consolidate its massive £2.3 billion debt.
On Valentines day, lenders will vote on the pub companies latest proposal to restructure requiring a vote of 75% to move forward.
If the plans are voted down, it is likely Punch Taverns will default on its repayments and slip into administration leaving publicans in fear of losing their premises and the deposits paid out to Punch to become landlords – in some cases more than £20,000.
Steve Kemp, GMB lead officer for tied pub tenants, said: “This proposal to restructure Punch’s debt pile puts into sharp relief the wrongly held view that shareholders in a pubco own a pub business.
“In fact the Punch shareholders don’t own a pub business; they own a holding company which invests in and manages incomes from pubs- these are called pub securitisations.
“These securitisations are the infernal machine that is closing pubs across the country. It is the same infernal machine that drove Southern Cross care homes to the wall.”
According to a report by The Metro, major creditors indicated last week that they were likely to oppose the restructuring despite Punch chairman Stephen Billingham saying failure to agree “will lead to a much worse outcome with considerable uncertainty for the business”.
A spokesman for Punch Taverns said: “An end to uncertainty is critical for Punch Taverns and its tenants.
“The restructuring outcome rests with city institutions whose decisions are being watched very carefully. We are doing everything we can to avoid default.
“But, in the event it happens, we would hope an administrative receiver would recognise the importance of the tenants to the future of the business and act in their interests.”