TROUBLED pub chain Punch Taverns has breached its debt obligations, the company said in an announcement to the market.
Punch’s £2.3bn debt pile is split into two securitised vehicles. Punch A holds £1.45bn of gross debt, while Punch B carries £884m. The landlord breached a covenant relating to Punch A in the quarter ending 1 March.
The pub added it is in negotiations with its bondholders and in the interests of all parties, it would look to restructure.
In a separate announcement, it added Punch B runs a “significant risk” of breaching its covenants in the quarter ending 1 June.
Executive chairman Stephen Billingham said: “Proactive engagement on the restructuring discussions is continuing and we urge all stakeholders to support the covenant waiver requests to provide the business with stability and time to effect a consensual restructuring of the group’s financing arrangements.”
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