Pizza Express executives are set to meet with lenders today in an attempt to save the restaurant chain from collapse.
Synonymous with the British high street, the organisation announced earlier this month that it has amounted a debt pile of around £1.1 billion or around £2.3 million per each of its 470 British restaurants.
But quite apart from many of its high street partners, who may be wavering from the inflated cost of goods and spiralling business rates, the chain is suffering from altogether different financial woes.
In fact, the organisation’s real struggle is keeping up with hefty interest payments, which currently stand at some £93 million per year. Despite making healthy profits, they are nowhere near enough to cover both the cost of operating as well as topping off creditors.
In its most recent statement, auditors state that the company has until 2021 before it is required to start paying back over £600 million to third party creditors, suggesting that some form of debt restructuring must go ahead.
The latest reports show that the chain – which employs around 14,000 people internationally – is in “early talks” to refinance “two tranches of borrowing” worth approximately £665 million.
Pizza Express was bought by private equity firm Hony in 2014. The Chinese-based firm is reported to have paid £873 million for the business, taking on much of the restaurant’s debts.
The chain has yet to comment.
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