Now there is a more realistic CVA than the one which was proposed for Rangers! Fitness First's CVA proposal has been approved with creditors accepting 28p in the £. The administrators said that the likely return in administration would have been 0.5p!
Approval of the CVA will also see lenders convert their debt into shares in the business once the restructuring programme is completed.
As we previously blogged the chain will see 67 of its gym's moved across to other operators and the remaining stores will get a 55% rent reduction across its remaining locations for 6 months whilst this transition is being completed.
This sounds like a good deal for Fitness First and again shows that a good CVA will get approval if it is realistic and fair.
Gym operators have seen their margins squeezed as budget operators come to the market and customers cut back on subscriptions.