Stonegate weighs £1bn disposal of 1,000-plus pubs to cut debt

Stonegate Group is advancing plans to offload much than 1,000 pubs successful a woody that could rise £1bn ($1.32bn) arsenic it seeks to trim a multibillion-dollar indebtedness burden, according to The Sunday Times.

Senior leaders astatine the operator, which runs Slug & Lettuce and Be At One, person been successful talks with imaginable advisers astir options for astir a 4th of its 4,300 venues.

The institution generated revenues supra £1.7bn successful 2024 but is carrying much than £3bn of borrowings arsenic of 29 September 2024, overmuch of it stemming from its 2019 merger with Ei.

The pubs earmarked for imaginable disposal - 1,034 sites known internally arsenic the “platinum” portfolio - are regarded arsenic immoderate of Stonegate’s strongest assets.

Industry sources cited by the paper suggested that the bundle could fetch up to £1bn.

A erstwhile effort to merchantability a akin fig of pubs successful 2023 was unsuccessful.

Subsequently, Stonegate securitised the platinum assets done a £638m indebtedness from Apollo, carving them retired wrong the concern and easing contiguous fiscal pressure.

A pub assemblage root told the publication: "The concern they ended up successful is simply a operation whereby they tin merchantability disconnected chunks of that concern without it damaging the remainder of [it].”

Managers are revisiting options arsenic a non-call play connected the Apollo financing ends successful January 2026, removing restrictions connected selling oregon refinancing the pubs.

One way nether information is selling the assets successful tranches of respective 100 alternatively than a azygous transaction, the study added.

Owned by backstage equity institution TDR Capital, Stonegate was created successful 2010 done the acquisition of 333 pubs from Mitchells & Butlers and grew via a bid of acquisitions.

Its £3bn tie-up with Ei made it the UK’s largest pub landlord, overtaking Greene King, but near the institution highly leveraged soon earlier Covid-19 closures deed the assemblage successful 2020.

Higher involvement rates person since accrued strain connected heavy indebted operators.

Stonegate’s concern costs reached £455m successful the twelvemonth to September 2024, according to its accounts.

Pub companies person besides faced higher wage bills pursuing increases successful employers’ nationalist security and the minimum wage.

The platinum portfolio is understood to beryllium producing £90m successful net earlier interest, taxation, depreciation and amortisation. The sites are each freehold, located crossed England and Wales, with nary successful Scotland.

Sources told the paper that “new people” specified arsenic backstage equity buyers whitethorn beryllium funny successful acquiring groups of pubs, fixed the standard of the offering.

"Stonegate weighs £1bn disposal of 1,000-plus pubs to chopped debt" was primitively created and published by Verdict Food Service, a GlobalData owned brand.