45 Orchid sites revert to Punch

Punch Taverns has taken back — and closed — 45 leasehold sites from administrators to the collapsed Orchid pub business, M&C Report ​has learnt.

It is understood that Punch intends to re-open 31 of the 45 in mid-January. The balance of 14 sites will remain closed while Punch seeks to dispose of the leases.

The figure is much higher than originally anticipated. Both Orchid and administrator PricewaterhouseCoopers (PwC) had intimated that about 20 to 25 were likely to revert to Punch.

Giles Thorley, chief executive of Punch Taverns, played down the development. He told M&C: "We sold this business for £571m so getting 50 or so back for nothing is not the biggest problem in the world."

The sites reverted to Punch as it sold the lion's share of the 280 sites that were used to form Orchid by buyer GI Partners, the US private equity firm, in 2006. As such it acts as the guarantor to the landlord of the properties, which is this case is Prestbury or British Land.

Thorley said that Punch would not automatically look to find buyers for all the sites. He said: "There are some cracking sites in there. They are leasehold, which is a disadvantage, but we will review them on a site-by-site basis, like we would do with anything else."

He said that the pubs had been closed temporarily because they had been handed back without tills and back-office systems. While a "small number" would remain closed most would re-open in the New Year.

Thorley said that the majority of pre-booked Christmas business at affected pubs had been transferred to other nearby sites.

The average annual rent roll for the sites is thought to be well above £100,000 per year. It is thought that at the time of the original deal from Punch, the leases were valued at £1m each.

Orchid has re-emerged as mainly a freehold managed pub company after GI undertook a pre-pack administration of the business through PwC. The deal also saw debt-for-equity swaps with Deutsche Bank and HBOS.