Punch tenants say restructure offers 'no relief'
In a statement, Punch said all remaining conditions to the restructuring proposals have been satisfied, after Royal Bank of Scotland (RBS) approved the move yesterday. Lloyds Bank approved the measure last week.
Executive chairman Stephen Billingham said: “Our financial restructuring has now been completed. This is good news for our tenants and our staff.
“I would like to thank all our 400 staff for their hard work and support over such a prolonged period of uncertainty. We can now move forward with a solid balance sheet and continue to progress our strategy and investment in our pubs.”
However, licensees said they did not think the announcement brought an end to uncertainty.
Chris Lindesay, of the Sun Inn in Dunsfold, Surrey, co-ordinated a network of Punch tenants earlier this year to communicate and share advice.
'This is not the end'
He said: “If you run the numbers on Punch, they are still in a parlous situation. The real issue is the fact they are taking too much money out of the relationship between them and their shareholders. How can you be in a situation where you are taking 80% of the profit out of a business, supposedly in an equal partnership, then not be able to pay your debts and having to be bailed out by your shareholders and suddenly think everything is going to be rosy?
“This is not the end. This is no certainty. This is no relief. In fact, an awful lot of Punch tenants are rather upset that Punch hasn’t gone bankrupt as they could see an awful lot more scope for organising the pub industry in a better way.”
He added that he has made several offers to buy his pub off Punch, but so far the company has not been willing to sell it “for a sensible price”.
“The hedgefunds who now own Punch are people that are expected to earn 30-40% annual returns on their investments. Those returns aren’t going to come from selling beer more fairly to their partners, in a situation where property is much more valuable when it isn’t a pub. I imagine they will be raking the pub stock of the country,” he said.
Clive Roberts, of the Anchor Hotel in Burnham, Essex, said: “On the surface, [Punch] is singing from the hymn sheets, but I don’t think the future is as crystal clear as they make out. We don’t know the final details. Now they’ve swapped debt for equity, who is to say how secure the pubs are now?”
'Same uncertainty'
A Punch tenant in York, who wishes to remain anonymous, said: “I don’t think this is going to change anything at all for lessees. We’ve pretty much had assurance that it’s going to be business as usual throughout the restructuring and beyond. We’ll carry on with the same uncertainty about deposits and beer prices.
“It’s a bit of a worry that they’re even more in the hands of the bondholders now – I suspect they will be controlling most of what goes on and they are going to want a pretty high return. But I don’t think there is anything more they can squeeze from the pubs.”
He added that he would welcome Punch restructuring its relationship with their lessees, something that is causing "massive resentment" among tenants.
“The whole system is designed to keep pubs on the edge of viability,” he said.
“It means we can’t keep invest in our people and our building as much as we should be able to. It’s a real shame Punch won’t show their lessees the same courtesy the shareholders have shown them.”
