Pizza Express owner in £80m lifeline to debt-ridden chain

Pizza Express owner in £80m lifeline to debt-ridden chain
By: Business Posted On: November 06, 2019 View: 72

Pizza Express owner in £80m lifeline to debt-ridden chain

The owner of Pizza Express has moved to counter concerns for its financial future through an £80m cash injection.

Chinese investment vehicle Hony Capital, which bought the chain in 2014, made the announcement weeks after Pizza Express hired advisers to help with creditor talks over its £1.1bn debt pile.

Then, Pizza Express - which has just shy of 500 restaurants in the UK and Ireland - was quick to deny speculation it was nearing collapse or seeking to close unprofitable stores.

A picture shows the signage at a closed-down Jamie's Italian restaurant in Glasgow on May 21, 2019. - British celebrity TV chef Jamie Oliver said Tuesday that he was "devastated" to announce that his restaurant group had collapsed, with the loss of 1,000 jobs. The group, which comprises 25 restaurants across Britain and includes the chains Jamie's Italian and Barbecoa steakhouse, has appointed administrators KPMG. (Photo by Andy Buchanan / AFP) / The erroneous mention[s] appearing in the metadat
Image: Jamie Oliver's restaurant chain employed more than 1,000 staff when tough trading forced its collapse in May

Like the high street, the casual dining sector has suffered a tough couple of years as consumers have been more cautious with their cash in the run-up to Brexit.

At the same time, firms have had to deal with a surge in costs from the likes of rising rents, business rates and minimum wage increases.

Jamie's Italian was the biggest name to collapse while Prezzo and Carluccio's have all closed sites.

The new money will be used by Pizza Express to buy back debt owed to bondholders and bolster the balance sheet.

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Its most recent trading update showed it was continuing to assess its future funding options in a tough business environment in its biggest market.

It showed UK and Ireland sales falling by 1.1% over the three months to 29 September, with underlying profits falling almost 9% to £19.6m.

Pizza Express said: "Approximately 95% of our UK and Ireland restaurants are profitable and there are no plans for closures outside the normal course of business."

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