YM chain Fitness First has avoided administration after creditors yesterday backed plans to restructure its lease agreements, the company said, prompting the sale of around half of its UK gyms and a £600m debt write off.
Creditors overwhelmingly approved a Company Voluntary Arrangement (CVA) – which lets a company with debt problems reach a voluntary agreement with its business creditors over the repayment of that debt. The CVA enables a rent renegotiation on some of the 79 gyms it is set to keep as prior rent commitments were unsustainable. Fitness First will now seek to sell 67 of its UK gyms. The sale should happen in the next few weeks and a number of rival gym operators have expressed interest.
The company’s wider financial restructuring can also kick in now the CVA has been approved.