Fitness First to sell off sites
The Fitness First gym company is to sell 50 loss-making sites across the UK after striking a deal with its lenders to wipe out debts of £565 million. The group is the largest health club group in the world.
The Fitness First gym company is to sell 50 loss-making sites across the UK after striking a deal with its lenders to wipe out debts of £565 million. The group is the largest health club group in the world.
It has premises situated in Wednesbury, Brierley Hill, Cannock, Kidderminster and Walsall Wood. It also has a woman-only gym in Birmingham Road, Wolverhampton, which is currently closed for repairs following a fire at the AMF Bowling alley above it in February.
Distress debt investment funds Oaktree Capital Management and Marathon have taken up almost 80 per cent of Fitness First's debt in return for an equity stake in the company.
They are also discussing injecting £100m to help restore the company's fortunes and guarantee its immediate future.
Fitness First, was formed in 1993 and currently has 142 gyms and employs 1,000 in the UK.
In total it has 13,000 staff at 437 gyms worldwide and 1.2 million members.
The company, which is owned by BC Capital Partners, is also considering a legal mechanism to cut rental payments if it fails to find buyers for its gyms, which have been hit by the fall in consumer spending and the rise in popularity of low-cost gyms.
Fitness First gyms which are not sold could face possible closure.
The £100m capital injection is expected to be?used to expand the company's presence in Asia,?where?trading?remains ?healthy.
BC Partners bought Fitness First from Cinven, another private equity firm, for £835m in 2005.
The economic downturn and the group's debts saw it miss an £18m interest payment last month.
