UK-based pubs and bars group Stonegate Pub Company has agreed a debt refinancing deal, addressing its debt of £2.2bn ($2.8bn).
Stonegate revealed today (31 July) that the refinancing package will include a circa £250m shareholder contribution from funds managed by private-equity firm and owner TDR Capital.
The deal will “see Stonegate’s balance sheet structure significantly simplified and strengthened”, the business said in a statement.
The owner of bar chains Slug & Lettuce and Be At One said its financial improvement strategy is “delivering results”. In the six months to 7 April 2024, Stonegate reported a 8% rise in adjusted EBITDA to £196m.
David McDowall, CEO of Stonegate Group, said: “We have always said we would achieve the right outcome on our refinancing requirements, and I am delighted we can now move forward with confidence and certainty, having achieved our balance sheet goals.
“The new agreement enables us to really focus on driving performance across all our divisions, and delivering on our strategy which is now having a material impact on our overall profitability.”
The news comes after Stonegate revealed in April that “there is a risk” that the hefty debt cannot be refinanced by the deadline of July 2025, despite a plan being “in place”.
Formed in 2010 and domiciled in the Cayman Islands, Stonegate owns a network of over 4,500 UK pubs and bars.
Stonegate’s total debts stood higher than £3bn at the end of its financial year in April, 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.
McDowall added today: “We are now in a really strong position to deliver on our longer-term objectives.”
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.
