HEALTH club group Fitness First has been thrown a lifeline as creditors backed a last-ditch bid to tackle its burgeoning debt pile.
The chain, which has a gym at Lockwood Park and employs 1,500 staff UK-wide, secured support for a company voluntary arrangement (CVA) which will allow an overhaul of the company’s leases to go ahead.
The shake-up will see 67 of the company’s 147 gyms in the UK transfer to other operators within the next six months.
In the meantime, rent on these gyms will be reduced to 55%.
Remaining clubs will continue to operate under the Fitness First brand.
Accountancy firm KPMG, which supervised the CVA, said the majority of the group’s landlords voted in favour of the proposals, which will give returns of up to 28p in the pound compared to just 0.5p in an administration.
But a spokeswoman for KPMG said it was too early to say which sites would be sold.
Andy Cosslett, Fitness First chief executive, said: “This gives us a strong platform on which to build.
“We are now drawing up plans to increase investment in our existing clubs, increase the number of markets in which we operate and increase our levels of service and innovation for the benefit of our million plus members worldwide.”
Approval of the CVA will also see lenders convert their debt into shares in the business.
Fitness First, which has 430 clubs worldwide, recently warned that it was struggling to meet its costs as it buckled under a £400m debt mountain.