Pizzaexpress is heading for a takeover by its lenders around this thirty days in a debt-for-equity swap with chinese owner hony capital this is certainly additionally prone to involve shutting a number of its high street restaurants hard-hit into the pandemic.
People within the 465m of senior secured bonds that straight back the organization are in advanced speaks over a restructuring deal, according to two different people familiar with the conversations. these are more likely to end in control of great britain business becoming passed towards the financial obligation holders, they stated.
The regards to the deal are nevertheless becoming talked about, with hony possibly using ownership associated with chinese operations because of the restructuring. this would keep the bigger uk business in the hands of the bondholders. the string features about 450 restaurants in the uk and roughly 600 globally.
Hony could nonetheless inject brand new equity into the business using the financial obligation maybe not set for readiness until after that summertime, the folks included, but this showed up progressively unlikely.
In an additional blow towards uks struggling high street, pizzaexpress is also prone to seek an organization voluntary arrangement within the restructuring. this would allow it to drop some outlets and renegotiate rents using its landlords.
It isn't clear just how many restaurants would be impacted, but anyone near the talks stated it can involve a somewhat small number offered an usually profitable company in britain prior to the beginning of the pandemic.
The coronavirus lockdown and financial fallout has actually strike the casual dining sector hard, pushing the high-street to efficiently shut for several months and resulting in wave of administrations and restructuring.
This has additionally hit honys objective to remain in charge of the business regardless of the huge debts on its balance sheet. last year, the chinese exclusive equity group acquired a stake inside junior debt, which experts and investors saw as an attempt to achieve better control over the continuing future of the organization.
Pizzaexpress was obtained by hony in a debt-laden 900m package in 2014. the organization today carries about 1.1bn in net borrowing from the bank far exceeding estimates of the equity price with more than half possessed by investors with its bonds. the 465m of secured bonds mature in august next year, as well as the unsecured 200m in august 2022.
Perella weinberg partners and latham & watkins are advising the bondholder group. houlihan lokey and kirkland & ellis tend to be advising pizzaexpress.
Pizzaexpress declined to review. hony cannot be achieved for comment.