Bondholders give Punch demerger plans the thumbs-down

Punch Taverns' bondholders have given a withering assessment of the pubco's plans to de-merge its managed pub business, accusing it of walking away from the issues facing the leased side of the group.

In a statement issued after Punch revealed its plan to split the Spirit managed pub business off from the leased operation, a spokesman for the ABI Special Committee of the pubco's bondholders said: "The [company's] strategic review is disappointing. We have waited six months for the review to be conducted, during which time operational performance in the leased estate, where bondholders have £2.5bn at risk, has continued to decline.

"The review does nothing to address this key issue of turning around the trading, and rather than engage in discussion with bondholders about that now, it prioritises a demerger of Spirit costing £30m.

"This says a lot about where [Punch's chief executive] Ian Dyson and the public limited company see their priorities. This strategic review does nothing to address the issues in the tenanted estate and is a 'walk-away' by another name from them. We remain concerned to see the real issues in the operating businesses addressed fast."

Dyson said yesterday that he did not regard the group as having walked away from the securitisation vehicles which house the vast majority of its leased pubs, known as Punch A and B.

He acknowledged there had "huge speculation" around what Punch might do, but said walking away was never on the cards.

"A walk-away was one of the alternatives considered during the recent strategic review, but it wouldn't have been in the best interests of the stakeholders, shareholders or bondholders," he said.

He also pointed to an improvement in net average income per leased pub in the second quarter - up 0.3 per cent - for the first time in three years.

Dyson said it was too early to say when a dialogue with the bondholders would begin, but added it was unlikely to be before the de-merger had been completed, which is expected to be around the end of the summer.