The embattled pub group Punch Taverns has proposed a radical restructuring of its £2bn-plus debt mountain, and posted improved trading.
Punch plans to direct more of its cash resources towards its senior debt, which has a higher ranking among creditors, intended to reduce its repayment obligations by £600m over the next five years.
The new proposal comes after bondholders rejected a plan announced in February.
The group, which has about 4,500 pubs, is weighed down by £2.1bn of debt built up during an acquisition spree in the era of cheap finance before the credit crisis. It has a complex debt structure, with its loans split into two securitised vehicles, Punch A and Punch B.
The proposed structure would reduce its cash interest payments to £32m a year and slash its debt pile by £500m over the next five years. Punch will put it to shareholders and bondholders this month.
The company's underlying net income fell by 3.3 per cent over the 40 weeks to 25 May. Punch also said it had sold another 246 pubs for £84m.