12 January 2024 , 10:14
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Thousands of Stonegate pubs could be at risk, a union has warned, as its parent company seeks to refinance debts worth £2.6billion.
Gary Lindsay, boss of TDR Capital which owns Stonegate pubs and the supermarket giant Asda, told the Business and Trade Select Committee on Tuesday that he was “confident” the debts could be refinanced this year. However, GMB Union raised concerns that due to high interest rates the refinances could lead to crippling payments to service the debt, which has already resulted in a “toxic culture of bullying and harassment” due to cost pressures at Asda.
GMB regional secretary Justin Bowden said that, like with Asda, the finances of the pub chain, which includes brands like Slug & Lettuce, Yates and Walkabout, are “equally lacking in transparency, with the ultimate holding company based in the Cayman Islands.”
He said: "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. TDR Capital must be accountable to local people and they have a duty to safeguard 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.”
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The Stonegate Pub Company is the largest in the UK, operating around 4,500 managed, leased and tenanted pubs across the country. The chain also employs around 19,000 workers in the UK across all of its chains.
Stonegate defended itself against the claims in a statement noting that it "continues to invest" in its pubs and its staff added: "in particular supporting local pubs which play such a key role in their communities.
The spokesperson said: “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 re-finance at the appropriate time."