Pizza Express owner to inject £80 million to reduce vast debt
Chinese private equity firm Hony bids to retain control of restaurant chain in any restructuring
Restaurant chain Pizza Express's Chinese owner Hony Capital is to put millions of pounds into the business to pay down some debt and increase its chances of retaining control in any restructuring.
The high-street chain began to spiral downwards this year due to being £1.1bn in debt and weak performance. Bondholders, who are owed £665m, warned that Hony may be forced to give up ownership in any loan restructuring.
On Wednesday Pizza Express said it had no plans to shut any UK outlets despite falling sales, the Financial Times reported.
Pizza Express said that 95 per cent of its restaurants in the UK and Ireland were profitable and there were “no plans for closures outside the normal course of business”.
The company told bondholders that Hony plans to buy back £80m ($102m,€92m) of its £200 million unsecured bonds, due for repayment in 2022.
Hony has offered to purchase the bonds at 20-40 per cent of the face value of the debt, according to a document seen by the Financial Times.
The Financial Times also reported that a source familiar with the matter said the plans showed Hony saw more value in the chain than some investors and added that some were surprised that Hony could afford to pump in more cash.
The Chinese private equity firm bought Pizza Express in a £900 million leveraged buyout in 2014. The chain has 477 restaurants and five franchise sites.