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Mon 7th Sep 2020 - PizzaExpress creditors approve CVA
PizzaExpress creditors approve CVA: PizzaExpress has announced its creditors have approved its proposed company voluntary arrangement (CVA). More than 89% of all responding creditors voted for the CVA, passing the 75% approval threshold; and 67% of responding unconnected creditors approved the proposal – more than the 50% required. An overall majority of landlords voted in favour of the CVA. The CVA will see 73 of its 449 UK restaurants close, resulting in the loss of about 1,100 jobs. PizzaExpress stated: “The directors thank creditors for their support during this period and look forward to our ongoing partnership as the hospitality industry recovers to growth. As previously announced, the CVA is a key component of a wider financial restructuring that will strengthen the business for the future. The successful vote unlocks the company’s ability to actively address the challenges brought by covid-19, securing more than 9,000 jobs in the UK.” The company said 355 of its UK restaurants are now open, with more than 30 more scheduled to welcome back customers in the coming weeks. As previously reported, the CVA is part of a wider restructuring of the business plan to shore up its finances and PizzaExpress has also hired advisers from Lazard to lead a sale process. PizzaExpress said an agreement has been reached with certain of its secured creditors and its majority shareholder, Hony Capital, “for a holistic recapitalisation and restructuring transaction that will significantly strengthen the group and provide funding to deliver its future growth plan”. The restructuring involving a significant de-leveraging of the group’s external debt, from £735m to £319m; extension of maturities; and, potentially, the transfer of majority ownership of the group to its secured noteholders. It also involves a major recapitalisation with the provision of up to £144m of committed new facilities to support the future development of the group’s business. Of the funds, £70m is available to support reopening PizzaExpress restaurants in the UK after an extended period of closure and further strategic development, and £74m is available for utilisation to refinance the group’s existing super senior debt facility, if required. The restructuring also involves the divestment of the group’s mainland China business. PizzaExpress said if the sale process does not result in any third party providing a bid for the group that is higher than the bid of the holders of the group’s secured notes, the holders of the senior secured notes will acquire the business, with individual holders being entitled to receive shares (pro rata) in a new holding company of the group and £200m of new senior secured notes, due in 2025.


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