20 Jun 2012
Fitness First creditors approve Company Voluntary Arrangement
BY Pete Hayman
Image: The group's CVA proposal has been approved
Fitness First is to restructure existing lease agreements on a number of its UK fitness clubs after creditors approved the group's Company Voluntary Arrangement (CVA) proposal.
Richard Fleming, UK head of restructuring at KPMG, is a supervisor of the CVA and said the proposal had received the backing of the required number of creditors.
In addition to addressing Fitness First's operational issues relating to its property portfolio, the CVA allows for a wider restructuring and injection of fresh capital to take place.
Fitness First announced earlier this month it would be selling 67 UK clubs and keeping 80, with all retained facilities to continue trading under the terms of the CVA.
At the same time, KPMG revealed the main components of the proposal would see rents of 57 facilities being kept at the same level and paid monthly for three years, not quarterly.
Five further clubs being retained at a reduced equivalent monthly rate of 65 per cent over the three-year period before returning to market-based rent, while 18 leases remain unaffected.
KPMG restructuring partner Brian Green said: "As we have sought to develop company voluntary arrangement models, we have worked with creditors to find workable compromise agreements.
"In the case of Fitness First, our conversations with landlords were particularly supportive of the continued payment of rates and the availability of a clawback mechanism to ensure they share in the business' fortunes going forward."
Details: www.fitnessfirst.co.uk (Fitness First CVA details)
Details: www.kpmg.com
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