(Bloomberg) — An attempt by lenders to get PizzaExpress Ltd. to open talks on ways to prop up the troubled restaurant chain has failed to bring its Chinese owner to the negotiating table.
The investors, holding 70% of PizzaExpress’s most senior bonds, sent a letter to the company a week ago pledging to provide new funds, according to people familiar with the matter. Hony Capital, which acquired PizzaExpress in a 900 million-pound ($1.2 billion) leveraged buyout five years ago, has so far met the approach with silence, said the people, who asked not to be identified because the matter’s private.
A spokesman for PizzaExpress declined to comment on the debt situation. A representative for Hony Capital declined to comment.
The clock is ticking for PizzaExpress to reduce the chain’s 1.1 billion-pound debt pile with its first debt maturity looming in August next year. The bondholders see value in the company, especially in the U.K. operations, and want to avoid the loss of a viable business, according to the people.
Hony has overseen an expansion of PizzaExpress into China just as a malaise took hold in Britain’s retail sector amid changing consumer habits and flagging consumer confidence. Creditors are concerned that the expansion is draining cash from the business. The chain’s restaurants in the U.K. and Ireland make about 18% more revenue per store than those in China and elsewhere, according to a recent report by investment bank Imperial Capital.