Article updated with commentary from Stonegate Pubs
The GMB Union has raised serious concerns over the financial position of the Stonegate Pub Company, a major player in the UK pub scene via the Slug & Lettuce, Be At One and Yates.
Stonegate’s Caymans-registered parent company TDR Capital (which also owns ASDA) currently has a £2.6 billion debt profile.
Despite TDR boss Gary Lindsay saying he was “confident” of the group’s debt refinancing strategy, GMB warned that “refinancing could lead to crippling payments to service the debt”.
“Huge 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,” the union said in a press release.
Justin Bowden, GMB’s southern regional secretary, took aim at Stonegate’s private equity ownership structure: "The problems we are experiencing with private equity-owned Asda at Gosport are not confined to just that store.
“We have experienced similar problems across the stores in the south of England.
“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."
GMB also accused TDR’s “opaque” business structure of lacking financial transparency.
“The position with the Stonegate Pub Company’s finances is equally lacking in transparency, with the ultimate holding company based in the Cayman Islands,” stated Bowden.
He added: “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.”
More than 4,500 pubs and 19,000 workers are at risk, warned GMB.
A spokesperson for Stonegate told Proactive: "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 re-finance at the appropriate time.”