Fitness First faces £550m restructure

GYM giant Fitness First is restructuring its £550m debt pile just months after global market turmoil forced it to put off a float in Singapore.

The chain, which is owned by private equity house BC Partners, is set to meet its lenders over the coming months because of an expectation it will breach the terms of its loans.

Several other buyout groups have approached BC Partners about a takeover but ultimately they could not raise the money needed because of the dire state of the debt market.

Fitness First’s lending facility will not expire until next year but, like many firms which were bought at the height of the buyout boom, it is having to cope with tougher market conditions. It is believed that directors are happy with recent trading, however, and they are working with consultancy Alix Partners on cost-cutting.

BC Partners, which declined to comment, began to look around at other ways for an exit after shelving plans for a listing last October. It was one of many UK and US companies, such as Groupon and Facebook, to postpone because of the swings in global markets.

BC Partners had been expected to raise around £500m in a listing valuing Fitness First at between £1bn and £1.2bn. The gym operator has built a strong presence in the Far East, including in Singapore, Hong Kong, Thailand, and Malaysia, and has more than 1.4m members in 17 countries in total.

Its origins go back to 1992 when entrepreneurs Mike Balfour and Christopher Pearce set up their first club in Bournemouth.

FAST FACTS | BC PARTNERS
● Its portfolio includes investments in Phones4U and estate agent Foxtons, known for its trademark branded Mini Coopers.

● Was close to buying CPA before the patents management giant went to Cinven last week.