Publicans could face cash crisis if Punch calls time
Punch Taverns has debts in excess of £2.3million (Picture: PA)

Pub chain Punch Taverns has admitted defeat in its attempt to convince lenders to back plans to tackle its £2.3billion debt mountain.

Britain’s second biggest pub landlord caved in to opposition from bondholders by agreeing to cancel a vote on its controversial proposals due to take place tomorrow.

Punch, which has 4,000 leased and tenanted pubs, will now reopen talks with lenders to work out a plan to restructure the business in the best interests of all stakeholders by mid April.

Pub landlords could lose up to £20,000 each – a total of £22million across the group – if Punch falls into administration.

Despite saying last week that the chain would be in ‘a mess’ if its debt plans were not approved, a Punch spokesman said yesterday: ‘We’re not in default, no administrator has been appointed and our next covenant test with the banks is not until April 15.

‘In the event of a default it would be a priority to speak to tenants as a first priority as they are bringing the cash into the business, but we’re not in that situation.’

The chain has been trying to restructure its debts for more than a year but MP and Save the Pub group chairman Greg Mulholland said creditors were never going to back its plans.

‘Whatever Punch does now to restructure its problems the astonishing level of debt remains, gained through the reckless over acquisition and securitisation model that made a few City boys filthy rich,’ he said.

‘We must now see a decisive end to the discredited, unsustainable and unjustifiable pubco tied business model which has also destroyed and closed thousands of valued British pubs.’