Punch Taverns' bondholders 'in talks with rival pubcos'

Punch Taverns' bondholders are reported to have held talks with rival operators with a view to them running those pubs currently covered by securitisations should the pubco default on the debt.

The Financial Times​ said that representatives of bondholders exposed to Punch to the tune of £2.5bn had held what it called "initial discussions" with Enterprise Inns and Midlands brewer Marston's to ascertain whether they would be prepared to run the pubs on the bondholders' behalf, or buy them outright.

Neither company would comment.

Around 5,000 pubs are believed to be covered by the Punch 'A' and 'B' securitisations and if payments against these are not kept up the pubs could revert to the bondholders, leaving the pubco with around 1,500 pubs split evenly between managed and remaining leased sites.

Since investors will not want to manage the pubs affected by the default they will look for others to do the job, hence the speculation they have approached other operators.

City analysts have mixed views on whether a default is a good strategic route for Punch. Some point to the £40m-plus the pubco will save annually and which could, in theory, be fed through to equity shareholders, while others do not see such a move as a realistic option.

Meanwhile sources close to Punch denied chief executive Ian Dyson had already completed his strategic and financial review of the business.

Historically Punch has said it would report on its review by the end of March and this remained the case, the source said.