NETHERLANDS: Heineken buys 30% Globe debt

By | 24 April 2009

Dutch brewer Heineken has bought up 30% of the senior debt in Globe Pub Company.

Financial details of the deal have not been disclosed, but a report in the Financial Times said the deal, signed with Globe owner Robert Tchenguiz, gave Heineken a "sizeable discount".

The sales gives the Dutch brewer a say in Globe's future should the company consider restructuring its debt.

Earlier this month Globe defaulted on a GBP257m (US$375m) bond issue. The pub operator, which has more than 400 pubs across Britain, has suffered alongside many of its peers from recession, a pub smoking ban and competition from retailers.

Up to 39 pubs are closing down every week in the UK, according to the British Beer & Pub Association. The closure rate has piled more pressure on brewers' on-trade beer sales.

Gerard Rijk, analyst with Netherlands-based ING, said in a note this week on Heineken's debt: "If Heineken manages to drive a major debt restructuring at Globe Pub (UK), net debt/EBITDA might face a pleasant surprise as the GBP440m Globe debt could be removed from the balance sheet."

Heineken, which saw like-for-like beer sales fall by 6% in the first quarter of 2009, reiterated this week that it plans to focus on cutting debt and costs.

Sectors: Soft drinks

Companies: Heineken

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