Oct 7, 2019

PizzaExpress bondholders press for debt restructuring

Bondholders in PizzaExpress are pressing the company to engage in restructuring talks as fears mount about the future of the 54-year-old business. Some bondholders - including distressed debt investor HIG Capital - have formed a group to begin negotiations with Hony Capital, the Chinese private equity firm that acquired the business in 2014 and recently suffered a setback with another high-profile investment when WeWork pulled its initial public offering. An investor in PizzaExpress debt said: "A debt restructuring is coming. The last set of numbers were disappointing and it's not as stable as some think." Hony Capital bought PizzaExpress, which was founded in 1965, in a £900m leveraged buyout, leaving the company loaded with debt at a time when the casual dining sector was beginning to suffer from huge oversupply and rising costs. Mark Brumby, an analyst at Langton Capital, pointed out that at its current levels, PizzaExpress' debt is equivalent to £1.6m per restaurant - much more than the value of each site itself.

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