Two separate £20 million strips of Virgin Active’s term loan, RCF and capex facility traded in the mid-70s at the end of last week, sources told Reorg.
Both sellers, Lloyds Banking Group and one other bank, are understood to have sold their positions through last week’s trades, sources said. The buyers are two different funds that are involved in finding new money options, sources added.
Stressed and distressed funds are looking at opportunities in Virgin Active’s debt facilities that all mature in June 2022. More banks are expected to exit the syndicate, which included HSBC, AIB Group, Barclays, Standard Chartered as well as Lloyds, as
reported.
The U.K. arm of the leisure group has been in talks to raise new funding as the Covid-19 pandemic hit its liquidity and cast doubts on its ability to continue as a going concern. Management disclosed in the group’s latest financial
report for 2019 that it is exploring all potential sources of funds and is in regular communication with lenders.
The group’s banking syndicate agreed in June to provide it with £25 million of new debt, matched by £25 million from shareholders, to mitigate the effects of the Covid-19 pandemic.
The company’s revenue dropped 50.1% year over year to £224.7 million in the nine months ended Sept. 30, according to an unaudited interim
report from its owner South African investment group
Brait. The fall came as a result of the closure of clubs in all territories in which it operates due to government-mandated lockdown restrictions.
--Jaishree Kalia, Mario Oliviero