Pub disposals: selling the family silver?

In June 2007 the market capitalisation of Mitchells & Butlers was £3.5bn. Last week it was £850m. In June 2007 the value of Enterprise Inns was £3.6bn. Last week it was £215m. In June 2007 the market capitalisation of Punch Taverns was £3.5bn. Last week it was a mere £90m.

So the market's view is that the face value of the UK's largest pub company, a business with assets of £6bn - and debts of £4bn - is less than that of a South American footballer who 'ummed' and 'aahed' about joining Manchester City FC then decided to stay in Italy.

I'm not being trite here. Just trying to get a sense of perspective. Contrary to what some people think I'm not an apologist for the large pubcos. When they screw up I'll do my best to point it out.

But - and, yes, I know I've said this before - hand-rubbing at the prospect of the downfall of the pubcos under a ton of debt is too simplistic a take on things.

Yes, share values have collapsed. Yes, there's a big question over the extent to which pubcos, notably Punch, can service debt as sales in pubs come under pressure and bondholders and banks loom like so many vultures waiting for that obstinate old elephant to finally keel over.

And generating cash by selling top end pubs - 'the family silver' - isn't everybody's idea of sound business strategy. It smacks of opportunism and highlights the degree to which the group is strapped for readies.

But then where's the beef if shifting a few 'star performers' helps reduce debt and offers new operators the chance to run those pubs in the process?

Meanwhile, many in the City believe that pubcos defaulting on debt repayments remains "miles away".

Whether you believe that depends on which side of the 'pubco good/pubco bad' fence you sit…