Punch Taverns Plc (PUB) senior bondholders said they will reject the company’s proposals for restructuring 2.3 billion pounds ($3.8 billion) of bonds and that the U.K. pub operator should re-open negotiations.
Investors remain willing to work in “good faith” to agree a consensual restructuring that’s in the best interest of all stakeholders, according to an e-mailed statement from a bondholder committee, along with funds managed and advised by Angelo Gordon Europe, Oaktree Capital Group LLC and Warwick Capital Partners LLP. The bondholders have blocking positions in a number of classes of notes and turned down three proposals last year.
The Burton-upon-Trent, England-based owner of more than 4,000 pubs told noteholders last month that its latest offer was final and the alternative was default. Punch has been negotiating with stakeholders since October 2012 to lower its debt burden as it seeks to combat a long-term decline in sales.
Punch officials didn’t immediately respond to e-mails and phone calls seeking comment.
The company has proposed reducing borrowings by canceling some notes in return for cash payments or issues of new securities to bondholders. It also offered to increase interest rates on some debt, modify repayments on other parts and strengthen covenants.
Punch has 16 classes of notes across two securitization financings, known as Punch A and Punch B. The senior bondholder committee included Kames Capital Plc, Legal & General Plc, Prudential Plc’s M&G unit, Standard Life Plc and Aviva Plc and is advised by investment bank Rothschild, according to an investor conference call last year.
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