Punch to hive off managed business

The debt-laden pub operator Punch Taverns has confirmed plans to shunt its Chef & Brewer and Fayre & Square branded pubs into a new managed pub business.

Spirit will consist of 1,372 pubs and will focus on the fast-growing, eating-out sector of the pub market, said Ian Dyson, the current Punch chief executive, who will take over the running of the business once it is demerged.

He added that the split, which roughly divides the group into its managed and tenanted parts, will enable it to invest in its managed pub estate. The rest of the group will focus on reducing thetenanted business from its current estate of 5,080 to a core of 3,000 quality pubs.To achieve this it will sell off 2,000 pubs over the nextfive years.

Mr Dyson said Spirit would aim to resume dividend payments next year.

The group still has debts of about £3.1bn, despite a steady disposal programme that saw almost 900 pubs sold last year. After the split, Spirit will take on debts of about £800m, while £2.3bn will remain with Punch. The new business will have its own stock market listing. The demerger is due to take place on 1 August.