Equinox signs debt relief pact with lender HPS Investment Partners
Equinox’s guarantee originally required it to repurchase at least a portion of SoulCycle’s bonds if spin studios debt to earnings exceeded certain thresholds. The new agreement frees Equinox Holdings from certain debt obligations, although another unit of the company still guarantees the bonds, the people said, who declined to provide further details of the deal.
Bloomberg reported last month that Equinox was seeking another amendment to the deadline. Representatives for Equinox and SoulCylce declined to comment. Reorg Research earlier reported the details of the deal.
In a note last June, S&P Global Ratings said another subsidiary of Related Cos. had agreed to contribute $ 125 million to help cover Equinox’s guarantee, but said the sum may not be enough.
“We would consider any further delay beyond February 15, 2021 to be tantamount to default,” S&P said at the time.
The entire fitness industry is reeling from the forced shutdowns linked to the pandemic. Chains such as Gold’s Gym International Inc., 24 Hour Fitness Worldwide Inc. and the owner of New York Sports Clubs filed for bankruptcy protection last year.
Like its rivals, Equinox has been hampered by lockdowns and social distancing rules that limit visitors and hours of operation. New York has allowed gyms to reopen with these guarantees, while SoulCycle has been allowed to resume operations in some cities and conduct outdoor classes elsewhere.
Equinox started out as a single fitness club on New York’s Upper West Side and has grown to more than 100 gyms around the world, according to its website. Locations include Los Angeles, Miami, and San Francisco and the company also operates brands such as Blink Fitness, Precision Run, and Pure Yoga, which have permanently closed at least one location in Manhattan.
Likewise, SoulCycle started with a studio on the Upper West Side of Manhattan in 2006 before expanding to the United States, according to its website. Equinox purchased a controlling stake in SoulCycle in 2011.
The private chain also received a minority investment in 2017 from L Catterton, a consumer-focused private equity firm. Quotes on the fitness company’s $ 1.02 billion loan due 2024 have hovered around 90 cents on the dollar.