More than 4,500 Stonegate pubs at risk amid £2.6bn debt
The union has raised concerns that with current high interest rates the refinancing could lead to crippling payments to service the debt
More than 4,500 Stonegate pubs could be at risk as parent company TDR capital seeks to refinance £2.5bn of debt, GMB Union has warned.
Gary Lindsay, boss of TDR Capital which also owns supermarket giant Asda, told the Business and Trade Select Committee on Tuesday [9 January] he was ‘confident’ £2.6bn of debts in the Stonegate Pub Company could be refinanced this year.
However, the union has raised concerns that with current high interest rates the refinancing could lead to crippling payments to service the debt.
GMB Union stated that interest payments on TDR Capital’s debts have already resulted in cost pressures at Asda, resulting in cuts in hours for staff, cutting corners on health and safety and a rise in a “toxic culture” of bullying and harassment.
Stonegate is “one of the largest” pub companies in the UK, with more than 4,500 pubs and more than 19,000 workers, including brands like Slug and Lettuce, Yates and Walkabout.
Justin Bowden, GMB Southern Regional Secretary, said: “The position with the Stonegate Pub Company’s finances is equally lacking in transparency, with the ultimate holding company based in the Cayman Islands.
“TDR Capital must be accountable to local people and they have a duty to safeguard the 650 local pubs which are vital community assets. GMB’s experience with private equity owners has been, and continues to be, wholly negative. We fear for the future of our local supermarkets and pubs in the hands of their private equity owners.”
Bowden added: “These problems are exacerbated by the fact that GMB, as the union for Asda staff, has never met the hands-on private equity owners since they took over the business. They boast that they are hard on shareholders, but they keep well away from the results of their hands-on initiatives. They have refused to explain to GMB gaps in the company’s accounts – saying that the 18 companies in their opaque structure are not GMB business.”
However, Stonegate has denied claims and said it is “confident in its ability to refinance”.
Stonegate told Retail Sector: “We continue to invest in our pubs and our people, in particular supporting local pubs which play such a key role in their communities. Our pub business remains very resilient despite the challenges our industry faces, with good like-for-like sales growth across the group.
“Following our recent successful financing announced in December as well as strong recent trading, we are well placed to deliver on our longer term objectives and we are very confident in our ability to refinance at the appropriate time.”
