PizzaExpress Hires Advisers Ahead of Debt Talks With Creditors

(Bloomberg) -- PizzaExpress Ltd. hired financial adviser Houlihan Lokey Inc. to prepare for debt talks with its creditors amid tough trading conditions for U.K. restaurant chains, according to people familiar with the matter.

Separately, a group of secured bondholders started working with Perella Weinberg Partners after appointing law firm Latham & Watkins in July, said the people, who asked not to be named because it’s private.

Representatives for Houlihan Lokey, Perella Weinberg and PizzaExpress declined to comment.

The U.K. casual dining chain has been struggling amid rising costs and a change of consumers habits dragging down margins, forcing restaurant managers to close sites and seek help in court to reduce rental costs. PizzaExpress’ competitor Prezzo shut down 94 of its restaurants last year, while celebrity chef Jamie Oliver’s dining chain filed for insolvency in May.

PizzaExpress has been struggling with its core U.K. market at a time when it was expanding in China following its acquisition by private equity firm Hony Capital in 2014. The company’s earnings before interest, taxes, depreciation, and amortization fell 11% in the second quarter while its debt rose to 7.9 times Ebitda, compared to 6.6 times a year earlier.

The company has 465 million pounds ($573 million) of secured bonds due in August 2021 and 200 million pounds of unsecured notes due a year later, respectively indicated at 84 and 23 pence on the pound, according to data compiled by Bloomberg.

Read more: PizzaExpress Bonds Diverge as Creditors Plan for Restructuring

To contact the reporters on this story: Antonio Vanuzzo in London at avanuzzo@bloomberg.net;Katie Linsell in London at klinsell@bloomberg.net

To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, Luca Casiraghi

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