After the struggles faced by Jamie’s Italian and Byron, reports this morning suggest Prezzo could be the next casual dining chain to have to undergo a restructuring.

According to The Times, Prezzo, which operates c300 sites, is understood to be suffering like-for-like sales declines of about 6 to 7%, or even worse for its struggling Mexican brand, Chimichanga. According to a report just before Christmas by Debtwire, the company was on target to breach its year-end debt covenants.

The report said that Prezzo, which placed 27 sites on the market last summer, might be forced to close or sell as many as 50 underperforming restaurants if it is to remain a viable business.

A source close to the group played down the scale of any potential disposals to the newspaper, but declined to comment on whether Prezzo had broken the terms of debt agreements with its lenders.

At the same time, a report by Reuters said that Prezzo, which was acquired by TPG, the US private equity firm, in January 2015 in a deal valuing the business at £304m, was in talks with its lenders after the price of its leveraged loans dropped in Europe’s secondary loan market.

Reuters said the company’s loans have been in gradual decline since last year, closing the first quarter of 2017 at 98.4% of face value, before dropping to 88 at the end of the second quarter and 86 at the end of the third quarter.

It said that Prezzo may be seeking covenant waivers on its loans as it struggles with a tough market.

In October, there were reports that TPG was preparing the loss-making business for a possible sale, with analysts tipping the Casual Dining Group, the private equity-backed owner of Bella Italia, Las Iguanas and Café Rouge, as a potential suitor.

However, the Prezzo source denied any kind of sale process involving the wider group was being considered and analysts suggested that, with TPG behind it, the group was less likely to have to do so.