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Heineken Buys Remaining Globe Debt

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Heineken, the world’s third largest brewer, has acquired all the remaining debt of the Globe Pub Company and in the process made a £193m accounting gain.

The brewer, which had previously agreed to buy the troubled operator’s 425 pubs, said that it had purchased syndicated Globe debt at a discount to the £175m face value. The company has now bought up all of Globe’s £230m debt, which had been a liability on its balance sheet.

Heineken also said that it had written down the value of its pub business in the UK by Eu80m due to falling property prices and beer sales, as well as the impact of acquiring the Globe portfolio.

In October, Heineken announced that it would takeover Globe’s pubs in late 2010 after acquiring the company out of receivership for £180m through a holding company called EBP Pub Company

Under the terms of the agreement Heineken signed a contract to supply the 425-pub estate of EBP with beer – and will provide corporate and estate management along the same lines as it previously offered to Globe, through its subsidiary S&N Pub Enterprises.

It said that the proceeds of the pub sale to EBP would principally be used to repay senior class A1 notes, 92.8% of which Heineken owns, at a face value of £175m.

Tchenguiz paid £345m to buy 364 pubs from Spirit in December 2004 to form Globe but earlier this year the company was forced to writedown the value of its estate by nearly £200m.

The estate decreased in value to just £160m when accounts were signed in July 2009 – meaning each pub was worth around £380,000 at that time.

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Tuesday, October 17, 8:16 pm

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