GYM chain LA Fitness is to walk away from 33 of its 80 clubs as part of a restructuring that it hopes will cut its debt pile by £250m.
The sale process depends on landlords agreeing revised lease terms at a number of clubs under a Company Voluntary Arrangement (CVA).
Business advisory firm Deloitte, which is supervising the process, warned the business faces potential administration without the backing of the CVA proposals by creditors at a meeting on March 24.
Deloitte partner Matt Smith said: “We believe that the CVA proposals offer a much better outcome for all creditors, including the landlords impacted by the proposed restructuring, than they would receive in administration.”
In 2012, Fitness First carried out a similar restructuring when nearly half of its clubs were transferred to other operators as part of a CVA agreement.
Doncaster-based LA Fitness has secured lending facilities worth £40 million, dependent on the outcome of the CVA process.
LA Fitness chief executive Martin Long said: “LA Fitness is a strong brand that is valued by its members.”