Enterprise Inns could raise as much as £200m by selling the freeholds of 100 pubs at public auctions, if a trial this month is successful.
The company is trialing the sale of seven freeholds at an Allsops auction on 15 October, hoping to raise £14.7m.
The company is offering private investors a 35-year lease with itself as tenant on the head-lease, subject to a five-yearly rent review and no indexation.
Chief executive Ted Tuppen said rents on offer to investors account for between 80 and 90% of each pub's total Ebidta. "We've taken advice on the rent that's appropriate," he told City analysts.
Tuppen told the Morning Advertiser that the auction had already seen a great deal of interest from private individuals, who are not earning much interest on their money in the bank and who would be receiving a yield of 6% on their investment in buying an Enterprise freehold.
Enterprise Inns would be receiving a sale price of 14 to 15 times Ebitda if pubs sell for their guide price.
The company currently has just 181 short leasehold pubs within the estate, creating a rent obligation for Enterprise of £2.6m per annum.
The company also said that it would look to refinance its £1bn bank syndicated facility within the next 12 months.
It was meeting syndicate members this month to discuss the facility. Syndicate members had indicated that, overall more would be available to loan to Enterprise on renewal than the company needed.
A number of German banks in the syndicate, due for renewal in May 2011, had indicated that they were unlikely to participate going forward, while others would take part on a pro rata basis and others had suggested they might increase their exposure.
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