RLPC-Fitness First attracts distressed fund Oaktree

Posted: February 18, 2012 at 9:31 am


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LONDON, Feb 17 (Reuters) - Distressed investment funds including Oaktree Capital are buying up debt and building a position in health club operator Fitness First, adding pressure on owner BC Partners' ability to restructure the company's debt, bankers said on Friday.

A number of lenders are selling out of the company, which has started talks to restructure its approximate 600 million pounds ($948 million) of loans, bankers said.

Distressed investors specialise in buying ailing companies' debt, often pursuing a 'loan to own' strategy with the intention of gaining control of a company in a restructuring

Oaktree acquired 45 million euros ($58.69 million) of Fitness First loans this week, at a discount of around 65 percent of face value, the bankers said. Oaktree is approaching other lenders willing to sell, the bankers added.

BC Partners declined to comment. No one at Oaktree Capital was immediately available to comment.

Last week about 39 million Australian dollars ($41.79 million) of Fitness First's loans traded at around the same discount. [ID: nL5E8DABAG]

RESTRUCTURING UNDERWAY

Distressed debt specialists and secondary loan traders attended a bank meeting last Thursday where the company discussed its first-quarter breach of covenants and its debt maturities after BC Partners failed to sell parts of the business last year to repay its debt.

The company needs to refinance or extend maturities on its loans, which fall due this and next year, according to Thomson Reuters LPC data. BC Partners hired advisors from Rothschild to restructure its debt, bankers said.

BC Partners bought Fitness First in 2005 for 1.2 billion euros ($950 million). It tried to float the Australian and Asian operations in Singapore last year but the IPO - also run by Rothschild - was pulled in September due to market volatility. ($1 = 0.7668 euros) ($1 = 0.9331 Australian dollars) ($1 = 0.6323 British pounds) (Editing by Greg Mahlich)

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RLPC-Fitness First attracts distressed fund Oaktree

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February 18th, 2012 at 9:31 am

Posted in Health and Fitness