UK: Punch Taverns to raise GBP350m to pay down debt
Punch Taverns, the UK's largest pub group, plans to raise up to GBP350m (US$573m) via share issue in order to meet debt repayments.
Punch said today (15 June) that it would issue new shares with immediate effect.
It admitted that, without the fresh finance, "it is possible that the Group will not be able to make sufficient payments" to fully repay convertible bonds set to mature in December 2010.
The placing, it said, represents an "attractive alternative for facilitating repayment". Punch has already sought to balance its books by suspending acquisitions and dividend payments. Last week, the group sold 11 pubs to rival Greene King for GBP30.4m, as part of an assets disposals plan.
Trading in the UK on-trade remains tough. Analyst and consulting group CGA Strategy told just-drinks last week that between 51 and 53 pubs are closing down every week, which equates to 2,750 annually.
Punch said today that trading for the first 40 weeks of its fiscal year, to the end of May, remained in-line with its full-year expectations. Like-for-like sales in the group's managed pub portfolio fell by 1.2%, compared to the same period a year earlier, although rose by 1% in the third quarter.
"Trading performance in the third quarter of the financial year shows early indications that our actions to stabilise performance are seeing some success," said Punch.
It added: "While the board remains confident about the longer term prospects for Punch and for the industry as a whole, it remains cautious about the prospects of any significant improvement in trading in the near term."
Greene King, the UK ale brewer and pub operator, has repurchased GBP7m (US$11.7m) of company debt....
Greene King has pledged to maintain brewing at the Belhaven Dunbar brewery in Scotland, after the group announced it would cut jobs at the site by moving bottling operations to southern England....
Greene King, the UK brewer and pub owner, has reported an increase in beer sales for the first 17 weeks of its fiscal year, despite a shrinking UK market....
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