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Pizza Express set to fall into hands of its lenders

Pizza Express is reportedly set to fall into the hands of its lenders, possibly as early as this month, which could lead to the possibility of store closures.

According to the Financial Times, its lenders are in talks with its Chinese owners Hony Capital for a debt-for equity swap with a group of investors in bonds worth £465m also reportedly in talks for a restructuring deal that would affect a “small” number of stores.

The FT also reported that with the debt not set for maturity until next summer there is a possibility that Hony could inject new equity into the company.

According to Pizza Express’ annual report last year, the 470-store pizza chain restaurant finished the year with a £1.12bn debt after a pre-tax loss of £55m.

About half of the interest payments were made to Hony, who employs 14,000 people. The Chinese company bought the Pizza Express chain from UK private equity firm Cinven in 2014.

At the time, the group hired advisors to begin the talks with the creditors who hold £465m of debt due for repayment in 2021 and £200m due the following year.

Pizza Express declined to comment.

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