British restaurant chain Prezzo is in talks with its lenders after the price of its leveraged loans dropped in Europe’s secondary loan market, news agency Reuters claimed this morning.
Private equity firm TPG acquired Prezzo four years ago, backed with a £155m leveraged loan financing, comprising a £130m term loan and a £25m pound revolving credit facility led by Barclays and Jefferies, according to the news agency.
Thomson Reuters LPC data shows that Prezzo’s term loan was quoted at around 80% of face value on January 25, but the loans have been in gradual decline since last year.
Given its performance, and with the UK casual dining sector comes under pressure, some banks have moved Prezzo’s loan from the front office to the work out groups, sources told Reuters.
Talks took place with lenders this week to discuss some of the issues, the sources said.
Some lenders speculated the company would be seeking a waiver on its financial covenants, the sources added. Traders are thought to be waiting for more clarity on how the situation will be turned around, Reuters said.
Prezzo operates more than 250 restaurants in the UK.
TPG declined to comment.