Gym firm Fitness First in debt deal

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Fitness FirstThe largest health club group in the world - Fitness First - is close to securing its future after it unveiled a debt deal with its lenders.

The gym chain, which employs 13,000 people and has 1.2 million members worldwide, said more than 90% of its lenders have signed a deal agreeing to the terms of a company turnaround plan.

The agreement will see the lenders convert their debt into shares in the business once the restructuring programme is completed, as well as providing significant long-term funding.

Fitness First, which has 430 clubs worldwide, including 140 in the UK, recently warned that it was struggling to meet its costs as it buckled under a £500 million-plus debt mountain.

The firm said the combination of having no debts and committed support from its lenders will bring long-term financial security to the company.

Chef executive Chris Stone said: "This announcement is an important milestone in our strategy to put in place a financial structure that will allow Fitness First to prosper in the future."

Fitness First, along with rival LA Fitness, has found revenues squeezed in recent months because consumers are spending less and budget gym operators are growing.

The chain was paying £144 million in interest on its borrowings each year on revenues of £636 million, it was previously reported.

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