Pizza Express has agreed a £70m loan with HPS Investment Partners amid a difficult time for casual dining chains as customers were advised to avoid eating out to stop the spread of coronavirus.
The new super senior facility agreement will be used to repay in full and cancel its £20m existing revolving credit facility and a £10m facility to Chinese private equity firm Hony Capital, which were both due to expire in August.
The rest of the loan will also be used to fund Pizza Express’s “general corporate and working capital requirement”.
The owner of the restaurant chain in November launched a tender offer to buy up £80m of the company’s unsecured bonds, as it looks to allay concerns about the firm’s financial future.
Hony Capital, which bought the company in 2014, appointed financial advisors before crucial talks with creditors last month over its £1.1bn debt pile.
The cash injection, of up to £80m, will be used to help pay off debt which bondholders are owed.
About £665m of the firm’s £1.1bn of loans is owned to bondholders. The money must start being paid in 2021.
Pizza Express said that despite sales rising 1.2 per cent in the three months to September, profits had sunk 8.7 per cent.