NETHERLANDS: Heineken buys back discounted debt through Globe

Heineken has helped to reduce its net debt through the acquisition of discount debt from its UK pub management company, Globe Pub Company.

The Netherlands-based brewer said today (28 May) that it has bought a further 55.6% of Class A1 Notes representing a face value of GBP111.2m (US$177.6m) issued by Globe Pub. Last month, Heineken bought up 30.1% of Globe's senior debt, representing a face value of GBP60.2m. The company, therefore, now owns 85.7% of the Class A1 Notes.

Heineken said it has also acquired 31.6% of Globe's Class B1 Notes, representing a face value of GBP18m, and a 21.7% participation in the syndicated bank debt, being GBP50m out of an aggregate of GBP230m.

"Heineken has purchased the notes and syndicated bank debt at a substantial discount to face value," the company said. "As Heineken has consolidated the Globe group for accounting purposes as per 28 April 2008, the net debt of Globe is included in the consolidated balance sheet of Heineken and therefore, the acquisition of debt of Globe at a discount, results in a reduction of Heineken's total net debt position and a realisation of a net book gain."

This book gain will be included as an exceptional item in the brewer's 2009 results.

The Globe group owns around 425 pubs across the UK. Scottish & Newcastle companies, acquired by Heineken a year ago, have a 30-year beer supply contract with Globe, in addition to its role as managing agent for the pub estate.