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Wed 6th Nov 2019 - PizzaExpress owner to inject £80m to pay down debt mountain
PizzaExpress owner to inject £80m to pay down debt mountain: Hony Capital, the China-based owner of PizzaExpress, will inject £80m of cash into the business to prop up its balance sheet. The cash will be used to pay down debt owed to bondholders as it grapples with tough trading conditions, reports The Telegraph. The casual dining chain also hopes to renegotiate a £20m corporate overdraft that is due to be repaid in nine months. PizzaExpress is struggling to repay £1.1bn of loans amid spiralling losses. Of these, £665m is owed to bondholders, which must start being paid in 2021. The bonds are trading at a heavy discount and being bought by hedge funds. They could seek to wrestle control of the company and cause fresh complications to what are already expected to be difficult restructuring discussions. In an update to bondholders seen by The Telegraph, PizzaExpress said although sales in the three months to September had risen 1.2%, profit, which doesn’t include interest payments on its debt mountain, had fallen 8.7%. The update said: “In the UK & Ireland segment, year-to-date performance continues to be impacted by a number of market and macroeconomic factors, including fragile consumer confidence given uncertainty around Brexit.” PizzaExpress has appointed restructuring experts from Holihan Lokey and lawyers from US firm Kirkland & Ellis to assist with restructuring its balance sheet. Bondholders have hired investment bank Perella Weinberg. The bondholder update repeated the company’s assertion that about “95% of our UK & Ireland restaurants are profitable and there are no plans for closures outside the normal course of business”. PizzaExpress had £20m of cash remaining at the end of September alongside its £20m corporate overdraft, which hasn’t been tapped.

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