Belfast Telegraph

Pizza Express brings in advisers over soaring debts at restaurant chain

By Henry Saker-Clark

casual dining chain Pizza Express, which has five outlets in Northern Ireland, has hired financial advisers ahead of crunch talks with creditors over soaring debts.

The restaurant chain has hired advisers at corporate finance firm Houlihan Lokey to prepare for debt talks with creditors amid difficult trading conditions for casual dining chains in the UK.

It has around 100 staff in Northern Ireland across its five Belfast restaurants.

Bloomberg reported that advisers will sit down with creditors in a bid to organise the company's debts, which currently stand at £665m.

Separately, a group of secured bondholders for the business have also started working with advisory firm Perella Weinberg Partners in relation to the talks, according to the report.

Sources close to the company said it is "not a business that is contemplating a CVA (Company Voluntary Agreement) or close to collapse".

It is understood talks with creditors are intended to look at a possible reorganisation of its large debts.

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The company, which was bought over by Chinese private equity firm Hony Capital five years ago, has to pay the first instalment of its repayments, worth £465m in secured bonds, by August 2021.

Its next repayment for £200m in unsecured notes is due to be repaid by the following year.

An industry source said that these talks with creditors are "not unusual", but "could mean that covenants have been broken over its debt repayment".

Debt covenants are terms set out between creditors and companies which typically state limits or financial thresholds which the company is not allowed to breach.

This could involve certain sales or profit expectations.

In the first half of 2019, Pizza Express reported a 0.2% rise in like-for-like sales.

Belfast Telegraph