By Joseph Lyons
Vulture funds are reportedly eyeing a portfolio of 1,000 British pubs as Stonegate grapples with rising interest rates on a multibillion-pound debt pile.
US distressed-debt investors Cerberus and Morgan Stanley Real Estate are among a host of others to have submitted bids for almost a quarter of the pub estate owned by Stonegate.
In a Times report it said that Stonegate is looking to spin off unencumbered pubs into a new special purpose vehicle (SPV). The country’s biggest pub operator is hoping to raise new debt to help pay down nearly £4bn of borrowings, half of which needs to be repaid or refinanced by July 2025.
Stonegate operates roughly 4,500, including branded sites such as Popworld, Slug & Lettuce and Be At One.
It was reported that bids to provide debt financing to the SPV were submitted two weeks ago. Sources told The Times that Stonegate’s advisers, Barclays and Eastdil, are looking to take one of the parties forward into exclusivity in the coming days.
The pub group is thought to be looking to raise around £600m, however, the debt could yet be shelved if bids are not deemed attractive.
Recently, Stonegate caused outrage by proposing to charge an extra 20p a pint at peak times at some 800 of its outlets.
Morgan Stanley declined to comment when approached by City A.M. Cerberus was approached for comment.
