Brait SE, a South African investment holding company, which counts billionaire businessman Christo Wiese among its owners, teamed up with Richard Branson’s Virgin Group to provide a much-needed financial boost to Virgin Active, a chain of health clubs with units in Europe and Africa.
The joint effort involves injecting £50 million ($63.2 million) into the fitness company, with the aim of aiding its recovery from the downturn experienced during the pandemic.
The $63.2-million injection comes at a crucial time for Virgin Active, as lenders to the company’s international debt have agreed to extend maturities by two years, stretching the repayment period until June 2027.
This move offers the company some breathing space and allows it to focus on regaining its pre-pandemic momentum.
Back in 2015, Brait, under the leadership of Wiese, a leading retail tycoon, acquired an 80-percent stake in Virgin Active for £682 million ($862.8 million), valuing the business at £1.3 billion ($1.64 billion).
The recent financial assistance from Brait and Virgin Group aims to accelerate the recovery process and surpass the company’s performance prior to the pandemic.
During the pandemic, Virgin Active underwent a successful restructuring agreement that enabled the company to navigate challenges posed by lockdown restrictions and the subsequent decline in gym attendance.
A notable victory came in the form of a London court ruling in favor of Virgin Active, allowing the company to eliminate rent arrears on most of its venues and avoid substantial future payments, despite facing opposition from most of its creditors.
Despite the latest cost of living crisis, Virgin Active has retained its client base. In the past 12 months alone, the fitness chain recorded a remarkable 14-percent growth in active memberships, reaching a total of 963,000.
While the company reported revenues of £436 million ($551.6 million) in 2022, a significant increase of 49 percent compared to the previous year, its performance still falls short of its 2019 results.
