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Thu 16th Jul 2020 - PizzaExpress draws up plans to close number of sites as part of restructuring process
PizzaExpress draws up plans to close number of sites as part of restructuring process: PizzaExpress, the Hony Capital-backed chain, has reportedly drawn up plans to close about 75 of its 470 UK sites, as part of a restructuring of the business. Sky News reported the number of site closures could be marginally higher or lower than 75 but a source said it was unlikely to represent more than 20% of PizzaExpress' UK business by number of outlets. It is thought the final number of proposed closures had yet to be arrived at, and would depend partly on the progress of formal talks with landlords, which are expected to get underway as soon as next week. A company voluntary arrangement would be used by PizzaExpress to cut its rent obligations across much of the rest of its UK estate. It would come alongside a wider financial restructuring reported earlier this week by The Times that would see the company's bondholders take control of its UK business from Hony Capital, the Chinese private equity investor, which bought the group in 2014 for £900m. A group of senior bondholders to PizzaExpress is believed to be in talks to potentially provide new funding to the Zoe Bowley-led business, in a deal that could see them take over the majority of the company from Hony. According to Bloomberg, creditors including Cyrus Capital Partners LP, HIG Capital LLC and Bain Capital Credit have proposed injecting cash into the casual dining chain in exchange for taking control of its core UK business. As part of the deal, Hony Capital may keep the Chinese arm. In May, PizzaExpress said it partly used credit lines provided by investment fund HPS to repay a revolving-credit facility and a super-senior loan from Hony, and asked for bondholders’ consent to push back publication of its accounts. That same month, the company said while planning for the future, it would undertake a comprehensive review of its business. Credit rating agency Standard & Poor said the agreement of a new £70m loan facility by PizzaExpress earlier this spring was only an “additional step a likely broad restructuring of the group's capital structure”. Houlihan Lokey was working with the business as financial advisors given its debt maturity, and has continued to do so through lock-down. PizzaExpress declined to comment.

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