Abu Dhabi, UAEThursday 21 November 2019

Fears for future of Pizza Express amid growing debt pile

The chain has more than 600 branches worldwide including 14 in the UAE

There are 14 Pizza Express branches in the UAE. Sammy Dallal / The National
There are 14 Pizza Express branches in the UAE. Sammy Dallal / The National

The restaurant chain Pizza Express is reportedly at risk of going into administration over its debt pile of £1.1 billion (Dh5 billion).

The chain is said to have hired financial advisers ahead of talks with its creditors, according to Bloomberg.

Pizza Express has more than 600 branches worldwide, including 14 in the UAE which are operated under a franchise agreement. Globally, it employs about 14,000 people.

Chinese private equity firm Hony Capital acquired the chain back in 2014 from a British private equity company. The deal was rumoured to be worth £873 million at the time, although Pizza Express was said to have been left with debt.

Sales in the UK, where the company was founded in 1965, and overseas fell last year, according to Pizza Express’ latest accounts. While high interest payments on its debt is costing Pizza Express £93.4m a year, eliminating its operating profits.

The debt payments coupled with the fall in sales has left Pizza Express in the red for the past two years. In 2018, the chain declared a loss of £55.8m on revenue of £543.8m.

Pizza Express is not facing immediate collapse as the chain has until 2021 to settle its debts.

However, it is feared the chain could follow the same path towards insolvency as Jamie’s Italian, which went into administration earlier this year.

Pizza Express was not immediately available for comment.

Updated: October 8, 2019 04:52 PM

SHARE

SHARE