LONDON (ShareCast) - Punch Taverns (LSE: PUB.L - news) has further rationalised its pub portfolio with the disposal of 11 outlets to
rival
Greene King (LSE: GNK.L - news) for £30.4m cash.
The pubs to be sold are freehold outlets located in central London, the south east of England and Scotland. The consideration will be satisfied in cash. Net disposal proceeds will be used to reduce debt and reinvest in the estate.
For the financial year ended 23 August 2008, the pubs being disposed of generated earnings before interest and tax of £3.55m and had a book value of £32.7m. Punch's gross debt stood at £4.46bn in March.
"This transaction is in line with our stated strategy of increasing free cash flow and reducing the overall level of our debt, whilst seeking to maintain investment in our high-quality pub estate," Giles Thorley, chief executive of Punch Taverns, said.
Seven of the pubs are in London and include the Bunch of Grapes in Knightsbridge and St Margaret's in Twickenham, whilst four are in Scotland including the Burnbrae in Bearsden, near Glasgow.
"I am really pleased we have been able to acquire these high quality assets, further strengthening our presence in two key geographies for us," Greene King's Rooney Anand added.
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