M&G adds muscle to Bannatyne’s Health Clubs with new £92m deal

THE BANNATYNE Group has agreed a £92m deal with M&G Investments for the sale and leaseback of the ground leases of 39 Bannatyne’s Health Clubs.

The cash injection will free the Bannatyne Group from millions of pounds of bank debt and allow it to clear its loans with the failed Anglo Irish Bank.

Entrepreneur and Dragon’s Den star Duncan Bannatyne yesterday said his business would make an “ideal” tenant for its new landlord and its investors.

The deal involves the sale of land and buildings and the creation of new long-term ground lease agreements with M& G. The company will retain long-term control of the buildings via very long and secure leasehold interests.

Bannatyne Group chief executive Nigel Armstrong said: “The transaction enables the business to be virtually debt free and will greatly benefit the liquidity of the business, at the same time allowing us to continue to fully control the operation and management of all the health clubs.”

The portfolio comprises 26 freehold and 13 long leasehold properties.

M&G Investments spokesman Ben Jones said the deal would provide investors with “very long term secure and index-linked cash flows”.