Punch Taverns Plc released the full terms of its plan to restructure 2.3 billion pounds ($3.9 billion) of debt after almost two years of negotiations with stakeholders.
The U.K. pub owner is asking them to vote in favor of the proposals at meetings on Sept. 17, according to a statement from the Burton-Upon-Trent, England-based company. At least 75 percent of creditors and shareholders need to back the plan, which already has the support of investors that own or control 65 percent of its bonds and 54 percent of its stock.
Punch said the restructuring will cut debt by about 600 million pounds. The company plans to allow some junior creditors to exchange notes for new securities, cash and shares and intends to sell new stock to be allocated between seven funds including Angelo Gordon & Co., Avenue Europe International Management LP, and Oaktree Capital Management LLC.
“It is of critical importance that shareholders and noteholders vote in favour of the resolutions in order to implement the restructuring and avoid the adverse consequences for the Group of the restructuring not proceeding,” Punch Chairman Stephen Billingham said in the statement.
The latest proposals are “broadly similar” to those announced on June 26, according to the statement. Along with shareholders and all classes of noteholders, Punch needs to reach a deal with other creditors including Royal Bank of Scotland Group Plc, Lloyds Banking Group Plc and Citigroup Inc. by Oct. 14 or risk default.
The owner of more than 4,000 pubs started negotiations with shareholders and bondholders in October 2012. It’s 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 its Punch A and Punch B securitizations, which are operated by independent boards.