Punch Taverns Plc said its 2.3 billion-pound ($3.9 billion) debt restructuring will be delayed because it needs more time to negotiate with stakeholders.
The U.K. pub operator had until today to start reorganizing its Punch A and Punch B securitizations, according to a statement from the Burton-Upon-Trent, England-based company. It said a deal could be reached during a grace period of 10 business days, although there is “no certainty” this will happen.
Punch plans to cut debt by about 600 million pounds as part of the restructuring that will dilute existing shareholders, according to a June 26 statement. It has also given details of proposals that allow some junior creditors to buy shares in the company at a discount so it can repay notes in the Punch A securitization for less than face value.
The owner of more than 4,000 pubs had already pushed back the deadline for reaching an accord. Noteholders agreed on July 18 to extend covenant waivers as long as terms for the restructuring were sent to stakeholders by today.
Punch started negotiations with shareholders and bond holders in October 2012. The company is trying to lower its debt burden after the U.K. recession hurt the pub industry, which was already suffering from a decline in beer consumption following a smoking ban and competition from supermarkets selling discount alcohol.
Punch has 16 classes of notes across two securitizations operated by independent boards.