Punch finally seals 'critical' refinancing

NEARLY £600m of debt will be wiped of the books of Punch after the pubs business secured the backing of enough creditors.

Last night Punch confirmed that RBS had followed in the footsteps of Lloyds a few days earlier in agreeing to the financial restructuring.

Punch’s debt will be reduced to £1.8bn, with the restructuring of the two securitisations leaving 85% of the company in the hands of its bondholders.

The deal required 75% approval of creditors, and discussions have been ongoing since the summer.

Punch became highly leveraged during its expansion phase, which took it at one point to 10,000 pubs, but it now holds just 4,000 and is looking to shed a further 1,000 following a major downturn in the market.

Some 3.8 million new shares have been issued in Punch as part of the deal, with 4.4 million now in issue.

In August, Punch executive chairman Stephen Billingham, had said the deal was “of critical importance” to avoid adverse consequences of not proceeding.