Pizza Express’s £665 Million Debts Are Set to Wipe Out Its Owner

Pizza Express’ turbulent year is set to get more complicated, with owners Hony Capital on the verge of leaving the business. Any restructuring could wipe out the private equity firm, which bought Pizza Express for £900 million in 2014, according to the Times.

Already in trouble, the forced restaurant closure occasioned by COVID-19 has pushed the value of Pizza Express, the business, lower than the total it owes to other businesses: its external debts. The total debt is around £1.1 billion, more than the £900 million Hony Capital paid for it and, constituted in part by £450 million in loans from Hony itself. Those loans are now effectively worthless, and Pizza Express has a £450 million bond repayment on the horizon next August. The expected solution — wherein people owed money exchange that debt for equity in Pizza Express — will effectively wipe out Hony’s ownership and force Hony — not Pizza Express — to collapse entirely.

While Pizza Express’ mounting debts have made headlines in the last year, and led to both a video full of pizza puns and an outpouring of preemptive grief, the chain which precipitated the omnipresence on Britain’s high streets of Carluccio’s, Prezzo, Strada, Jamie’s Italian, and Ask Italian and outlasted them all in the restructuring stakes is likely to survive, in some form. But it has done so while being supported by debt, after debt, after debt, layering up private equity acquisitions like toppings on a Romana; a fate that has already hastened the shredding of Cafe Rouge, Bella Italia, and Frankie and Benny’s, at the cost of 5,000 people’s jobs. COVID-19 might have quickened the pace of these collapses, but the vastly inflated business models of private equity-backed restaurant groups are the base of the problem.