What happened: A buyer for Steve Nash Fitness World and Sports Clubs has been confirmed. Details of the offer have not yet been made public.
Why it matters: Members, former employees and creditors should soon have more insight on the nature of the arrangement, and what it may mean for them.
A buyer for Steve Nash Fitness World and Sports Clubs has been confirmed.
Mario Mainella, a licensed insolvency trustee with The Bowra Group, told Business in Vancouver that a successful bidder has been chosen, and that the bidder has "significant experience in the fitness industry."
The identity of the bidder and the terms of the offer have not yet been made public. The bid will need to be approved by the BC Supreme Court.
The month-long sales process for SNFW Fitness B.C. Ltd. – which owns more than two-dozen locations under Steve Nash, UFC Gym and Crunch Fitness brands – was recently extended by a week to allow the company and its advisors time to evaluate the bids that were received.
The number of bids received has not yet been disclosed.
After closing its locations and terminating nearly all of its approximately 1,300 staff members, SNFW Fitness filed a notice of intention to make a proposal under Canadian bankruptcy and insolvency legislation on April 3, owing more than $35 million to creditors.
"We appreciate that at this difficult time, this decision adds another financial burden to you, our creditors," company management wrote in a letter to creditors dated April 9.
"However, our intention with taking this step is to gain the necessary time, and flexibility to formulate a restructuring plan that will enable us to re-open our doors, and get back to the business of a healthy life, when this crisis is over."
According to the trustee's first report to court, dated April 22, the board of directors at SNFW Fitness determined the company was "not a viable business without a significant equity commitment and injection to fund COVID-19 shutdown costs and operating losses for several months after restarting operations post COVID-19 shutdown."
The equity injection needed was estimated at more than $10 million.
The Bank of Montreal – owed $32 million by the company – is in support of the company's sales process, according to court documents.
Both the trustee and SNFW Fitness believe that a sale, instead of a bankruptcy, will maximize recovery to stakeholders.
