Punch Taverns has formally started the sale process for 500 of its leased pubs by offering their existing lessees first refusal on the properties.

The group, which said in November that it would sell about 6 per cent of its 8,360-pub estate, sent letters to the lessees at the end of last month asking them to make offers by about Easter if interested in buying their pub.

A spokesman said that Punch had already received “considerable interest” from lessees, but declined to give further details about the sale process.

It is not unusual for large pub groups to dispose of their worst-performing operations each year. However, Punch needs the cash that the sales will generate more than usual. The group announced in November that it had cut the value of hundreds of poorly performing pubs in its accounts by £295 million, resulting in a loss of £80 million in its year to August 23.

About half the writedowns related to 500 of Punch's worst-performing leased pubs, many of which are thought to be among the properties put up for sale and on which book values are believed to have been cut by between 50 and 60 per cent.

As well as the looming recession, Punch has been coping with the smoking ban in England, two successive poor summers and rising costs for items such as food and fuel.

Punch's shares have lost more than 90 per cent of their value in the past year, amid the declining conditions and outlook for the pub industry.

When presenting Punch's disappointing annual results in November, Giles Thorley, the chief executive, said that one of the company's biggest problems during the summer had been trying to hold back a wave of negative sentiment, much of it exacerbated by short-sellers of its shares.

Mr Thorley said: “The market perception has been the biggest issue. It's not the nicest time to be running a public company at the moment. You do feel the weight of expectations, especially negative ones.”

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