Fitness First to restructure debt

In 2003, Cinven backed the Fitness First management to take the company private in a transaction that included the acquisition of Fitness First's debt, giving the group an enterprise value of £402.8m. Two years later, BC Partners acquired the group as part of an £835m transaction comprising around £300m equity and a £500m debt. The debt package provided by Mizuho Corporate Bank combined senior debt and mezzanine.

In August 2010, BC Partners and other shareholders injected £50m worth of bonds into the company. A month later, its lending banks agreed to ease lending terms in exchange for higher interest rates.

The following month, the group published accounts that revealed net liabilities of £612m. According to reports, a combination of acquisitions and a debt-heavy structure has left the group with borrowings of £1.48bn, £490m of which is in the form of high-interest preference shares as part of the 2005 buyout. These shares are entitled to an annual dividend of 15%. Excluding debts owed to BC Partners and other shareholders, the group is now said to have borrowings of £550m.

In November that year, the group sold the Dutch arm of its business to fitness club operator HealthCity International, after a 10% loss in turnover on the previous year and Fitness First reported pre-tax losses of £241m in 2009. The vendor's CEO, Colin Waggett, described the move as an opportunity for the firm to concentrate its resources and management on higher growth markets such as Asia.

BC Partners had hoped to float Fitness First on the Singapore stock exchange, having appointed advisers including Credit Suisse and JP Morgan last year. The private equity group abandoned the plan soon after.

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• UK / Ireland
• BC Partners