Punch mulls spin-off of tenanted estate to cut debt: report

LONDON (Reuters) - Punch Taverns (PUB.L) is considering plans to offload 6,000 tenanted pubs to its bondholders to slash its debt, the Sunday Times reported.

The firm has hired Goldman Sachs and Blackstone to advise on a restructuring with a spin-off of the tenanted pubs division--pubs which are run by publicans who pay Punch rent and rely on them for beer supplies--one option being considered, said the paper.

The plan would allow new chief executive Ian Dyson to concentrate on Punch's directly-managed unit of around 800 pubs, which includes the Chef & Brewer chain.

Punch could also look to hive off a portion of the loans and freeholds, sell pubs or undertake a debt-for-equity swap, the Sunday Times said.

Punch said in October it aimed to prune its tenanted estate to a core of 4,700 pubs over the next two to four years from the current level of 6,700.

Dyson will outline a new strategy for the company in early 2011, the newspaper added, citing City sources.

Punch could not be reached by Reuters for comment on Sunday.

(Reporting by Sarah Young; Editing by David Cowell)