The company behind Pizza Hut’s restaurants in Britain owed more than £50m as it collapsed before being rescued, it has been revealed.
Heart with Smart was saved in January by an entity controlled by investment firm Directional Capital in a deal that saw 139 Pizza Hut Restaurants acquired, and led to the closure of one Pizza Hut site, and three Itsu franchise sites.
The new owner was the brand’s main partner in Denmark and Sweden while Heart with Smart was Pizza Hut’s dine-in franchise partner in the UK. Propel revealed that Directional Capital paid £10m to acquire Heart with Smart.
The pre-pack administration, which was overseen by Interpath Advisory, came at the end of a two-month process to find new investors for the company. The deal saved more than 3,000 jobs across the country.
Before the deal, the largest shareholders in the business were PGIM Private Capital (PGIM) through its mezzanine lending fund, Pricoa Capital Partners, the junior secured lender, with total shareholding of 32.5% and Jens Hofma, group chief executive, with a shareholding of 34.8%.
PGIM held a financial interest in the group since April 2018 when it provided a multi tranche debt and equity package to support the acquisition of the business’ share capital from the previous majority shareholder, Rutland Partners.
While Heart with Smart licensed the Pizza Hut name from owner Yum! Brands, the US food company was not involved in its delivery outlets. Now a new document filed with Companies House by Interpath has revealed Heart with Smart had a total deficiency of £53.1m.
Of that total, it had a shortfall of £31.5m to Pricoa Private Capital and £8.3m to Pricoa Capital Partners. Heart with Smart also owed £8.3m to unsecured creditors.
