Punch cancels more than 33% of convertible bonds to cut debt

Pub group Punch Taverns has repurchased more than one third of one of its convertible bonds reducing the outstanding debt on it to just over £100m.

This latest measure to cut debt continues Punch’s drive to cut its overall debt from £5b to £3.5b by the end of 2009.
The payoff leaves £101.9m-worth of the bonds outstanding, and equates to the cancellation of around 63% of bonds previously in issue.

A Punch spokesman said the company had arranged for the bonds to be cancelled after deciding market conditions presented it with the opportunity to buy back debt.

Punch has generated over £400m through the sale of struggling pubs so far this year and it intends to continue this disposal programme to further pay back debts. Most recently, it added 450 pubs to its “turnaround division” of troubled pubs.

The operator raised £350m through a share issue in July to help pay back £275m of convertible bonds that were used to purchase the Spirit Group in 2006 and which mature in December 2010.

In August the group also revealed it had reduced its debt by more than £1b since the beginning of the year, with experts predicting its debts would fall to £3.5b by the end of the year.


Punch Taverns to raise £350m through share issue >>

Punch Taverns’ share value soars after debts cut by £1b >>

Punch to disregard slot machine income when setting rents >>

By Emma White

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