Pizza Express owner plans ?80m cash injection to reduce debt
By Duncan Ferris
Date: Wednesday 06 Nov 2019
(Sharecast News) - Pizza Express's Chinese owner Hony Capital will inject £80.0m into the business in order to pay down some of its vast amount of debt.
The Italian restaurant chain is struggling to repay £1.1bn of loans amid spiralling losses, with £665.0m of this amount owed to bondholders who must begin receiving repayments by 2021.
Hony Capital plans to offer the cash injection to buy back some of its £200.0m unsecured bonds, which are due for repayment in 2022.
The Financial Times reported that a source familiar with the matter said the plans showed that Hony saw more value in the chain than some investors and added that it was a surprise to some that Hony could afford to pump more cash into the business.
For its part, Pizza Express commented that 95% of its UK & Ireland restaurants are profitable, before adding that it had no plans for closures outside the normal course of business and highlighting recent improvements in trading.
"Based on our unaudited preliminary management accounts for the 13-week period between 1 July 2019 and 29 September 2019, group revenue increased by £1.6m to £138.6m," said a statement from the chain.
Fears that the business could start axing locations emerged in October, when the business began vital talks with creditors over its spiralling debt and appointed advisers Houlihan Lokey and Kirkland & Ellis to assist with exploring options.
Hony purchased the chain for £900.0m back in 2014, before over-saturation and rising operating costs hit the casual dining sector and caused difficulties and closures at contemporaries such as Jamie's Italian, Prezzo and Carluccio's.
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