Hony to lose control of PizzaExpress in debt-for-equity swap – report

Katharine Hidalgo
15 July 2020

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Hony Capital is expected to lose control of PizzaExpress in a debt-for-equity restructuring, according to a report by the Times.

The firm is said to have considered an equity injection but is now prepared to lose control of the business. The restructuring will see bondholders exchange their debt for equity in a deal that could be completed by the week commencing 20 July 2020, the report said.

Many bondholders bought into the restaurant chain in late 2019 as its bonds traded lower.

The report suggested Hony could split the company and retain ownership of PizzaExpress's Chinese operations.

The firm acquired PizzaExpress in 2014 for around £900m, or 10x EBITDA; the restaurant chain was previously part of Cinven-owned Gondola Holdings.

Cinven acquired Gondola in December 2006. The £900m take-private included a £290m equity ticket supplied from Cinven's fourth fund and a £610m debt package provided by Bank of Scotland.

PizzaExpress declined to comment, while Hony was unavailable for comment.