Pizza Express is set to be taken over by its bondholders after a sale process seeking potential buyers failed to find a competitive offer.

The Times reports the deal would involve owner Hony Capital handing over restaurant chain via a debt-for-equity swap, with Hony expected to retain control of Pizza Express’s operations in mainland China.

Under the agreement with its secured noteholders and Hony, the group would be restructured and its external debt reduced from £735m to £319m. It would receive £144m of new facilities to support development of the business.

As part of the restructuring, the British division of Pizza Express would be put through a company voluntary arrangement to enable the group to close 73 unviable sites, with the loss of up to 1,100 jobs.

More than 89% of creditors voted to support the CVA, which includes a cut in outstanding rent arrears, reduced rental agreements and a temporary move from quarterly to monthly rents.

In parallel with the debt restructuring, the company hired Lazard, the financial advisory group, to seek offers putting a higher value on the business than that implied by the debt-for-equity swap.

A vote of all bondholders to approve the debt-for-equity swap is due to take place next month.

The CVA, which does not affect its Irish or international operations, will involve the permanent closure of sites including Aberdeen, Bristol, Nottingham and Newcastle, as well the original site on Wardour Street in Soho. The CVA secures 9,000 jobs.