IT'S feared Pizza Express could be the next high street chain to collapse, as the firm hires financial advisers ahead of crunch talks with creditors.

The chain, which has a restaurant in Church Strret, Ludlow, has hired advisers to prepare for debt talks with creditors amid difficult trading conditions for casual dining chains in the UK.

Sources close to the company said it is "not a business that is contemplating a CVA (Company Voluntary Agreement) or close to collapse".

It is understood that the talks with creditors are intended to look at a possible reorganisation of its large debts, which currently stand at £665 million.

An industry source said these talks with creditors are "not unusual", but "could mean that covenants have been broken over its debt repayment".

Debt covenants are terms set out between creditors and companies which typically state limits or financial thresholds which the company is not allowed to breach. This could involve certain sales or profit expectations.

In the first half of 2019, Pizza Express reported a 0.2 per cent rise in like-for-like sales amid difficult trading conditions.

The company also posted 7.7 per cent decline in underlying earnings to £32.4 million for the period, with the slump blamed on rising costs.

Pizza Express declined to comment.

The company, which was bought by Chinese private equity firm Hony Capital in 2014, has to pay the first instalment of its repayments, worth £465 million in secured bonds, by August 2021.

Its next repayment for £200 million in unsecured notes is due to be repaid by the following year.