Hamish Champ: Whither Punch Taverns?

All eyes - or most, anyway - will be on Punch Taverns in a couple of week's time when the pubco reveals the results of its much anticipated strategic review.

Quite how chief executive Ian Dyson plans to deal with the group's £3bn debt burden remains to be seen, but he is in pretty good position to take radical action, if he so wishes.

He can point to the company's financial situation and argue that the issues facing the company weren't created on his watch. If he can resolve them, his stock will soar.

If Dyson decides to return a number of the group's 6,800 pubs to bondholders, what will that mean for those lessees whose businesses are caught up in the move?

Many have expressed themselves delighted at the prospect, since - they argue - the bondholders will either offer better ongoing terms and conditions or will be inclined to consider selling the property to the sitting tenant.

The bondholders might also look to sell such pubs en masse​ to a third party, though where they would find a buyer in the current market is not immediately apparent.

One financial observer I spoke with last week reckoned a lessee's life under a regime of bondholding landlords might actually become more onerous than the current regime. The new owners would be no more inclined to reduce rent than Punch, he believed.

If nothing else there will be those hoping that the experience of watching Punch and other similar companies buying up pub estates on the back of huge debts will be a thing of the past.

Seasoned veterans of the pub sector point to the juggling of debt maintenance and operational demands as being a factor in the demise of many a watering hole. The property plays have added little to the industry, they say, beyond creating many of the problems that have affected it.

Surely, they say, lessons have been learned.

But even the worst hangovers in the world eventually pass. In business, people either forget or think they hold the key to avoiding the pitfalls which befell those who went before them.

In different economic circumstances such leveraged models could rise again. Which is something to think about…