Britain's largest pub operator, Stonegate, has received a £250m cash injection from its private equity owners, TDR Capital, to prevent defaults on its substantial debt. This move is part of a refinancing effort to manage Stonegate's £3bn debt, which includes a significant portion from its 2019 acquisition of Ei Group.

Stonegate, which operates over 4,000 pubs across the UK, including the Slug & Lettuce chain, had previously warned of "material uncertainty" regarding its ability to continue due to difficulties in refinancing £2.2bn of its debt. The new refinancing terms extend the debt maturity to 2029, alleviating financial pressure as the company recovers from the pandemic and the cost of living crisis.

As part of the refinancing deal, Albacore Capital Group, one of the lenders, will receive a stake in Stonegate and the right to appoint a director to its board. This arrangement aims to stabilize the company's finances and ensure its long-term viability.

Despite a return of customers post-pandemic, Stonegate has faced challenges due to rising interest rates, which increased its finance costs to £301m last year. This led to a pre-tax loss of £257m, despite an operating profit of £68m. The company also faced criticism for implementing dynamic pricing, charging an extra 20p per pint during peak times at around 800 sites.

The refinancing comes shortly after TDR Capital's acquisition of a controlling stake in Asda, following a £500m deal. TDR now owns 67.5% of Asda, with the remaining shares held by the Issa brothers and Walmart.

TDR Capital stated that the refinancing would reduce Stonegate's debt burden, enabling the company to invest approximately £300m over the next three years. Additionally, Stonegate reported a 7.7% increase in profits in the first half of the current financial year compared to the previous year.

David McDowall, Stonegate's CEO, expressed confidence in the company's future, stating that the refinancing has achieved their balance sheet goals, allowing them to move forward with certainty.