PizzaExpress's creditors agree to restaurant closure plan

[NEW YORK] PizzaExpress's creditors approved a company plan to reduce rents and shut 73 of its UK restaurants as part of the chain's effort to fix its finances amid the economic slump.

Almost 90 per cent of the firm's creditors and a majority of landlords supported a so-called Company Voluntary Arrangement proposed by the company, according to a regulatory filing on Monday. The deal paves the way for a financial restructuring which will see owner Hony Capital ceding control to creditors.

The iconic PizzaExpress chain, born in London's West End in the 1960s and ubiquitous in town centres across the UK, has been hit by changing consumer habits in its home market at the same time as having to shoulder the financial burden of Hony's plans to expand the brand overseas.

The company was already struggling under its debt pile before the coronavirus pandemic forced it to close restaurants in March.

As part of the restructuring plan, bondholders including US firms Cyrus Capital Partners, HIG Bayside Capital and Bain Capital Credit will take over PizzaExpress, while total debt will be cut by more than half. Hony will keep control of Chinese operations.

BLOOMBERG