Billionaires Branson, Wiese give fresh funding to gym club chain Virgin Active
Virgin Active got a double boost to help its recovery from the pandemic, as shareholders gave the gym club chain extra cash, and lenders pushed back deadlines to pay its debt.
Brait PLC — the company in which South African billionaire Christo Wiese is the largest shareholder — and Richard Branson’s Virgin Group Holdings Ltd. injected £50 million ($63 million) of equity last month to fund growth initiatives, according to an annual report by Brait, its largest shareholder. The fresh funding came as lenders to Virgin Active’s international debt agreed to extend maturities by two years to June 2027, the report said.
Virgin Active had €508 million of bank debt as of December 2022. The financing is split between loans for the European and Asia-Pacific operations of the business — the so-called international debt — and loans for the South African business.
The firm reported revenue of £436 million in 2022, up 49% compared with the previous year, yet still well below 2019 results. Virgin Active will use capital to speed up the recovery back to and above pre-pandemic levels, Brait said in its report. A representative for Virgin Active didn’t respond to a request for comment by Bloomberg, while a spokesperson for Virgin Group declined to comment.
Even amid a cost-of-living crisis, clients have so far been sticking with Virgin Active’s services. Active membership has grown by 14% to 963,000 over the past 12 months, according to Brait’s annual statements.
Virgin Active sealed a restructuring deal during the pandemic, as lockdown restrictions kept customers away from gyms. A London court at the time established that Virgin Active could wipe out the rent arrears on most of its venues and avoid future steep payments, despite the opposition of a majority of its creditors