Anyone who's been following the Punch story will feel this has a ring of the inevitable about it. Under former boss Giles Thorley, it became the biggest operator in the industry by borrowing a ton of money against its pub properties - all at top-of-the-market valuations - and using the cash to fund expansion. Pub tenants then had to pay Punch hefty rents, as well as buying their beer through their company.
This was all well and good when the property market was booming. But when the credit crunch hit - with the industry already suffering from the impact of the smoking ban and fierce competition from the supermarkets - it all went pear-shaped. Now, like many a regretful drinker, it's paying the price for past excess: it's lost 95% of its value over the past four years, while racking up a head-spinning debt pile of £3.3bn (at last count). That's more than six times what it's currently worth.
CEO Iain Dyson, who joined from M&S last year, admits this model is unsustainable (not before time, we'd argue). His theory is that a demerger will free up Spirit, the managed pubs arm, to cash in on the recent rise in eating out - without the Punch millstone around its neck. And he may be right.
The latter's prospects look much gloomier, though. More reliant on the traditional market for straight boozing, which continues to decline, it has suffered a double-digit decline in profits for the past two years. Punch has already been forced to offer product discounts and rent concessions worth £2m a month to help its tenants stay afloat - and it reckons this market will keep shrinking by about 3% a year over the next five years. Given the likely duty increases on booze, more purse-string-tightening by punters, and the ongoing challenge from the supermarkets, this may be a conservative estimate...