Wed 31st Jul 2024 - Stonegate agrees refinancing, includes £250m contribution from TDR Capital Stonegate agrees refinancing, includes £250m contribution from TDR Capital: Stonegate Group, the UK’s largest pub company, has announced the agreement of its debt refinancing requirements. The company said that it comes following positive discussions with bondholders and TDR Capital, which supports the current strategic direction of the company, the leadership of the business and performance enhancement initiatives. The refinancing package, which follows the announcement in December 2023 of the financing of a portfolio of 1,034 pubs, will see Stonegate’s balance sheet structure “significantly simplified and strengthened”. As part of the deal, funds managed by TDR Capital will make a circa £250m shareholder contribution, demonstrating its “continued support and confidence in the future of the business and the Great British pub”. Bloomberg reported last week that Stonegate was nearing an agreement with its creditors to address its circa £3bn debt pile. The company has been in talks for months over how to tackle its capital structure amid looming maturities. Stonegate has £2.2bn of first lien bonds coming due in July 2025. Under the plan being discussed, those would be refinanced, with a longer maturity and a higher coupon. Funds holding those notes include Arini, King Street Capital Management LP and Sculptor Capital Management. Those notes are currently quoted at 99p, compared with less than 92p in late 2023, according to Bloomberg pricing. Meanwhile, £400m of second lien loans due in 2028 would be partially repaid, with holders including Canyon Partners LLC exchanging the rest for new debt. Finally, one of Stonegate’s holding companies had received a payment-in-kind facility from investors led by AlbaCore Capital LLP in 2019, and the debt has increased to more than £500m over the years, according to Bloomberg calculations. Stonegate said: “The completion of the debt refinancing requirements provides certainty for Stonegate and is testament to the strong performance of the business and the continued support by its bondholders and its owner. Stonegate has a clear strategy in place to drive financial improvement focussed on its commitment to position every site for success (putting the right pub in the right place, with the right investment), continuous innovation, investment in technology, increased efficiencies and strategic asset sales. This strategy is now delivering results.” In the first half to 7 April 2024, Stonegate reported an 8% rise in adjusted Ebitda to £196m with a particularly strong performance from leased and tenanted and operator-led businesses. Stonegate said that this does not include the boost from the strong performance of the England team in the recent Euro 2024 football tournament. David McDowall, chief executive of Stonegate Group, said: “We have always said we would achieve the right outcome on our refinancing requirements, and I am delighted we can now move forward with confidence and certainty, having achieved our balance sheet goals. The new agreement enables us to really focus on driving performance across all our divisions, and delivering on our strategy, which is now having a material impact on our overall profitability. I am pleased that we now have certainty to truly focus on what we do best, which is bringing people together through our passion for great pubs, bars and venues. I would like to thank our lenders for the positive way we have reached these agreements and TDR for its continued support. Most importantly, I would like to thank Stonegate colleagues for their continued dedication, commitment and passion which has seen us navigate a difficult, few years. We are now in a really strong position to deliver on our longer-term objectives.” Stonegate features in the Propel Turnover & Profits Blue Book, which is available exclusively to Premium Club members and features 947 companies. Stonegate’s turnover of £1,719,000,000 for the 52 weeks ended 24 September 2023 is the eighth highest in the database. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription.