United Kingdom pub operator Punch Taverns Plc had earlier proposed a restructuring plan for its GBP2.3 billion or US$3.6 billion of existing debt. The plan though was rejected by its bondholders.
A committee of senior bondholders had earlier declined a restructuring bid from Punch itself dated last April. The committee said there was no consultation on the revised terms prior to the June 10 announcement and the new offer made was "not a fully formed proposal capable of being considered."
The owner of the pubs, numbering over 4,000, had been infusing money into two securitization financings identified as Punch A and Punch B in order to avoid the breach of agreed upon conditions. According to the company's finance director Steve Dando during a conference call with the company's investors, the vehicles were 'unsustainable'.
The English company had revised its offer such as accelerated payments of its senior notes, ceilings on the cash amounts from bonds securitizing income from the pubs themselves as well as a proposal to buy back some high ranking bonds. In this restructuring plan, a total of GBP 600 million pounds can be reduced for the next five years.
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