Punch bondholders appoint advisers
A number of Punch Taverns' bondholders are reported to have appointed Rothschild, the investment bank, to advise them ahead of meetings with the highly indebted pubco.
According to the Financial Times, the investors are members of the Association of British Insurers (ABI), and are believed to include holders of all three Punch securitisation vehicles.
Some City analysts have argued that Punch should default on two of the securitisations which would lead to the bondholders owning around 5,300 pubs, leaving the pubco with a pub estate of approximately 1,500 leased and managed pubs.
Bondholders, along with owners of Punch's shares, are keenly awaiting the outcome of a strategic review being helmed by Ian Dyson, the group's chief executive.
Dyson is tasked with cutting the group's current £3bn-plus net debt and defaulting on the bonds is one option and is expected to deliver the results olf his review in the first quarter of 2011.
As well as defaulting on the bonds, which could save the group more than £40m a year in repayments, Dyson could try and renegotiate the group's existing debt repayment arrangements or undertake a debt-for-equity swap.
If bondholders do take possession of the pubs covered by the securitisations they will inevitably look for a management team to run them, opening the door for those currently overseeing the Punch leased business to move over and work for the new owners, or a completely new outfit.
The FT also reported that Moodys, the credit agency, put nearly £2bn of Punch's debt on watch for a downgrade last week over fears regarding its cashflows.
