Punch Taverns has unveiled the full terms of its proposals to restructure the business in a bid to combat its "unsustainable" debt.
The plans involve slashing its debt by £600m in a debt-for-equity swap, diluting the holdings of its existing shareholders in a scheme that will see 20 existing shares worth just one new share.
The company announced this morning that it had the support of 65% of the noteholders across Punch A and Punch B, and 54% of the equity share capital of the business.
Punch's current net debt leverage stands at 10.8 times EBITDA. The measures proposed this morning would see total net debt reduced to 7.7 times EBITDA, with gross securitisation debt of just under £1.6b.
Punch's currently issued share capital will represent just 15% of the total enlarged issued share capital if the plan goes through.
The process is now subject to approval by its shareholders, all classes of noteholders in Punch A and Punch B, and certain other types of creditors. If approvals are obtained, the proposals are expected to be put into action on 8 October, when dealings in new ordinary shares will begin.
The company warned that failure to obtain approval would result in a "near-term" default.
Stephen Billingham, executive chairman of Punch Taverns said: "The board believes that the restructuring will create a more robust balance sheet which will provide stability for the business, provide a firm base to allow Punch to build on recent improvements in trading and lead to further deleveraging.
"The benefits of approving the restructuring are clear and of benefit to all stakeholders. It is of critical importance that shareholders and noteholders vote in favour of the resolutions in order to implement the restructuring and avoid the adverse consequences for the group of the restructuring not proceeding."