LA Fitness International LLC is weighing options including a capital raise to address its roughly $1.7 billion debt load and help it weather the COVID-19 pandemic, Bloomberg News reported. The fitness chain, operating under a forbearance agreement that expires Oct. 15, is aiming to reach a deal with lenders to address liquidity needs and keep the business going through the pandemic. Lenders have organized with PJT Partners, which is representing them in talks with the company. Advisors from PJT reached out to the company in recent days in anticipation of working toward a consensual deal. The Irvine, Calif.-based chain’s restructuring plans remain fluid and could change depending on market conditions and virus-related openings and closings. Robert Wilson, LA Fitness’ general counsel, said that the chain has been in contact with lenders and PJT and is working with them “to appropriately address the company’s liquidity and its successful emergence from the Covid closures.” He said that the firm hasn’t hired its own advisers and isn’t weighing a bankruptcy filing at this time if lender talks fail. Like many of its competitors, LA Fitness has deferred some rent payments to try to stay afloat while its locations were closed to help stem the spread of COVID-19. The delayed payments are coming due in the next few months and the company may need to raise new money from existing lenders or outside parties to cover rent payments and other operational costs.
