PizzaExpress CVA could close 15% of its UK restaurants
The restructure of PizzaExpress will see it enter a company voluntary arrangement (CVA) "in the near future" which could result in around 15% of the group's UK restaurants closing and put up to 1,100 jobs at risk.
The group said today it hopes to reduce its UK restaurant estate and rental cost base to protect the remaining 9,000 jobs. Should the proposals go ahead, the company said it will look for redeployment opportunities both internally and externally for those employees impacted and offer support.
The group has also engaged Lazard & Co to advise it on a sale process to identify third party interest in an acquisition of the group. However, if no third party provides a bid higher than that of the group's secured noteholders, majority ownership of the group will be transferred to its secured noteholders.
A number of PizzaExpress' existing secured creditors have committed a new facility of up to £144m, of which £70m is available to support reopening PizzaExpress restaurants in the UK, and £74m is available to refinance the group's existing super senior debt facility, if required.
Group chief financial officer Andy Pellington said: "Today's agreement with our share and debt holders provides us with a significantly more robust balance sheet as well as material additional funding. It is a complete solution to our balance sheet issues and creates strong foundations to build on for future success.
"While we have had to make some very difficult decisions, none of which has been taken lightly, we are confident in the actions being taken to reduce the level of debt, create a more focused business and improve the operational performance, all of which puts us in a much stronger position. We can now plan to invest in both our UK & Ireland and international businesses as well as support our teams as they return to work."
Zoe Bowley, UK and Ireland managing director, added: "Our business has a long history of success, but the UK-wide lockdown has hit the hospitality industry particularly hard. While the financial restructuring is a positive step forward, at the same time we have had to make some really tough decisions. As a result, it is with a heavy heart that we expect to permanently close a proportion of our restaurants, losing valued team members in the process. This is incredibly sad for our PizzaExpress family and we will do everything we can to support our teams at this time.
"As we continue to reopen our restaurants for dine in and delivery, we will successfully navigate the extended period of social distancing expected in the months ahead and, in so doing, protect 9,000 jobs. The initial signs from the restaurants that have been reopened have been very encouraging and we hope that our loyal customers continue to support us now more than ever."
PizzaExpress operates 449 restaurants throughout the UK, the vast majority of which it said were trading profitably before lockdown and 166 have reopened, with further reopenings planned. Founded by Peter Boizot in Soho in 1965, PizzaExpress has more than 600 restaurants globally.
Houlihan Lokey EMEA and Kirkland & Ellis International, as financial advisor and as legal advisor, respectively, are advising the group in relation to the restructuring.
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