UK-based pubs and bars group Stonegate Pub Company has revealed it may struggle to refinance its debt of £2.2bn ($2.8bn).
The owner of bar chains Slug & Lettuce and Be At One has revealed “there is a risk” that the hefty debt cannot be refinanced by the deadline of July 2025, despite a plan being “in place”.
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In a filing with Companies House on Monday (8 April), Stonegate said “the company and group may be unable to realise their assets and discharge their liabilities in the normal course of business” if it cannot refinance the debt pile.
It added: “The macroeconomic environment has had a significant impact on the group in the current year and will continue to do so moving forward. Whilst inflation remains high, the cost-of-living crisis in the UK has led to lower profit and operating cashflows than would otherwise have resulted had these conditions not existed.”
“There is a risk that should the £2.2bn debt not be refinanced, the group would not have the ability to repay it when it falls due. Plans are being formulated to refinance the debt, but these haven’t been executed at the date of approval of these financial statements.”
Owned by private-equity firm TDR Capital and domiciled in the Cayman Islands, Stonegate owns a network of 4,400 UK pubs and bars.
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By GlobalDataStonegate’s total debts stood higher than £3bn at the end of its financial year, paying more than £300m in finance costs last year, including £235m of interest on its loan notes.
A large portion of the total debt stems from its acquisition of rival pub business Ei Group in 2019. The deal, which turned Stonegate into Britain’s largest pub operator, valued Ei at £3bn, of which £1.7bn was debt.
David McDowall, chief executive at Stonegate, said: “We have been very clear that we continue to work towards achieving our long-term balance sheet goals, with the successful refinancing of a portion of our estate in December marking a significant strategic step towards this.”
The pub group’s adjusted revenue rose from £1.61bn in 2022 to £1.72bn in its latest fiscal year. However, adjusted EBITDA fell to £375m from £400m while operating profit dropped marginally from £242m to 219m.
