Britain's largest pub operator is preparing 1 billion sell-off of more than 1,000 venues

"The move comes as the company struggles with more than £3 billion of debt built up largely through its £3 billion takeover of rival Ei in 2019. The pubs under review - 1,034 sites internally known as Stonegate's "platinum" collection - are regarded as among the company's strongest assets. Sources said the package could fetch up to £1 billion. Stonegate attempted to offload a similar number of pubs in 2023, but the sale did not progress."

"After that failed process, Stonegate securitised the platinum estate using a £638 million loan from private equity firm Apollo, carving the pubs out into a separate entity and easing immediate pressure on the wider group. The company's executives are reassessing options ahead of January, when a "non-call period" on the Apollo loan - which currently prevents Stonegate from selling or refinancing the pubs - expires. One option being considered is breaking the estate into several large tranches rather than seeking a single buyer."

"Its takeover of Ei made it the country's biggest pub landlord, overtaking Greene King, but also saddled the business with heavy borrowing shortly before the Covid pandemic forced pubs to shut for months. The financial strain has only intensified since. High interest rates and rising operating costs have weighed heavily on the business: Stonegate's finance costs hit £455 million in the year to 29 September 2024, while the group reported a £214 million loss for the year."

Stonegate faces more than £3 billion of debt largely stemming from its £3 billion takeover of Ei in 2019. The company is reviewing 1,034 pubs in its "platinum" collection, which could fetch up to £1 billion. The estate was securitised with a £638 million Apollo loan and placed in a separate entity, with a non-call period preventing sales or refinancing until January. Executives are weighing options including splitting the estate into several large tranches. Rising interest rates, higher labour costs and operating expenses have driven finance costs to £455 million and produced a £214 million annual loss.

Read at Business Matters