Punch Taverns raised £375 million yesterday to cut debt in response to difficult trading conditions.

The move sparked speculation that the embattled pub company's rivals would follow suit, with particular focus on Enterprise Inns.

Punch has been trying to whittle down its £4.5 billion debt and will use some of the proceeds to buy back a share of the £275million in convertible bonds that it issued in 2006 to fund the acquisition of Spirit Group.

The new shares were issued at 100p each - a 33 per cent discount to Friday night's closing price - and represent 58 per cent of the enlarged group's share capital. Punch shares closed down 44p at 104p.

Giles Thorley, chief executive of Punch, said that the capital-raising, which was achieved through a firm placing and open offer, arose after the company was encouraged to deal with short-term debt by leading shareholders. He said that it put Punch on a surer footing than its rivals.

The company opted for a placing and open offer rather than a conventional rights issue so that it did not exclude from participation American investors who are exposed to Punch through derivatives.

Punch has disposed of pubs, cancelled dividend payments and repurchased some of its borrowings to tackle its debt. It said the fundraising would help it avoid disposals of its core portfolio. Punch owns about 8,000 pubs, but it sold 11 of its leading venues to Greene King, the Abbot Ale and IPA brewer, for £30.4 million last week. Previously it had been disposing of poorly performing pubs. Mr Thorley said that it remained strategy to dispose of “non-core” pubs, those that were too small or in poor locations.

Greene King and Punch are the only big pub firms to have tapped shareholders for extra funds. Enterprise Inns has a £1 billion debt facility that it intends to refinance next year.

Punch also revealed yesterday that like-for-like sales at its managed estate were down 1.2 per cent in the 40 weeks to May 30, an improvement on recent performance. Third-quarter sales were 11 per cent above last year.

Like-for-like earnings at its leased estate fell by 11.2 per cent in the period.

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