SHARES in Punch Taverns have tumbled by 5% after the pub company decided to pursue further talks with bondholders on proposals to restructure its £2.3 billion debt pile.

The company, which leases 170 pubs in Scotland, initially planned to put resolutions on the restructure to the vote with the holders of 16 classes of debt tomorrow.

It is now working towards reaching an agreement ahead of the next covenant reporting date of April 15.

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The failure to reach a deal this week sparked uncertainty for thousands of tenants around the UK, whom it has been speculated risk losing deposits averaging around £6000 if the pubco defaults on its debt.

Punch warned again yesterday it will default unless it can reach a "consensual restructuring" with its bondholders. The debt is held by the Punch A and Punch B securitisations, under which 2300 and 1800 of the Punch pubs are owned respectively.

Punch plc has been working to reach agreement with its bondholders for 14 months, but has found it difficult to find common ground between its mix of senior and junior note holders.

If a consensual restructuring is not agreed on April 15, it is understood that Punch A will default, closely followed by Punch B, triggering a move into administration.

This is likely to put tenants' deposits at risk as they were not ringfenced under a securitisation deal set up 10 years ago, though there were indications an administrator would move to protect tenants to limit damage to the business.

Punch said it remained confident of reaching a restructuring deal before April 15.

Paul Waterson, chief executive of trade body the Scottish Licensed Trade Association, said the challenges facing Punch illustrate the flaws of the pub leasing model, which sees tenants "tied" into agreements to buy beer from landlords, sharing income from gaming machines, and "onerous" rental agreements.

Stating that tenants should be give more freedom to operate, Mr Waterson argued the major pubcos have also failed to understand the Scottish market. He said: "They brought in a combative element we never had up here, and it has not done Punch any favours."

Shares in Punch Taverns closed down 0.62p at 11.88p