Creditors of Midlands-based pub company Punch Taverns has urged it to reopen talks over a restructuring of its £2.3 billion debt, saying they would not support an earlier proposal to avoid a default.
The company announced it was embarking on a complex debt reduction plan earlier this month, after being hit hard by Britain’s economic downturn, and is trying to reschedule the amount of cash owed to creditors.
Bondholders had already rejected an earlier proposal put forward last year stating it was too generous to shareholders and junior creditors.
And earlier this month, Punch put forward a revised proposal of a debt extension and a reduction in the amount that will be repaid to creditors.
But it is understood the bondholders said the creditors had found issues with the commercial terms, the structure of the new notes and the documentation.
A consortium of major creditors said they were unable to support the revised proposals, and would vote against them at any meetings of the issuer companies.
A statement said: ““The creditors believe Punch should reopen negotiations and remain willing to work in good faith to agree a consensual restructuring. We continue to believe this to be in the best interests of all stakeholders.”
Punch said it had acknowledged the statement and pledged to continue discussions on the restructuring proposals. Punch has over 4,200 pubs in its portfolio across the UK.