Chinese investor throws PizzaExpress £80m lifeline

06 November 2019 by
Chinese investor throws PizzaExpress £80m lifeline

Hony Capital, the Chinese investment firm that owns PizzaExpress, has injected £80m into the business to ease its debt woes.

The news came just weeks after it emerged that the casual dining brand had called in financial advisor Houlihan Lokey and legal advisor Ellis International to help tackle its £1.1bn debt pile.

Hony Capital acquired PizzaExpress in 2014 and has lent the brand around £500m, with another £607.7m owed to external creditors, according to its 2018 annual report.

The restaurant chain, which was founded in 1965 by Peter Boizot and has around 477 sites in the UK and Ireland, faces a repayment bill of £465m due in 2021, with another £200m due in 2022. The group also has access to an undrawn revolving credit facility of £20m which will mature in August 2020, which it will look to extend or refinance.

Hony's latest injection will be used to acquire up to £80m of the group's senior debt notes due by 2022, according to an announcement to the London Stock Exchange.

In a trading update, PizzaExpress said it continued to grapple with fragile consumer confidence and ongoing Brexit uncertainty. It reported like-for-like sales down 1.1% in the UK and Ireland for the 13 weeks to 29 September this year, with EBITDA of £19.9m and a margin of 17.9%, a fall of 1.3%.

But the brand added that 95% of its UK and Ireland restaurants were profitable and that there were no plans for closures "outside the normal course of business".

A PizzaExpress spokesperson confirmed the funding injection but declined to comment further.

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