Sports Club retains investment banker to sell some of its assets, again questions future

By Jeff Pines

Washington, Nov. 19 - The Sports Club Co. Inc. retained an investment banker to help it sell some of its assets or clubs to bring enough cash to retire some of its 11 3/8% senior secured notes due 2006 and for working capital. It did not identify the banker.

Given its financial track record and the company's potential, management once again raised the question of Sport Club's ability to continue as a going concern, which it has stated in previous financial filings.

The company reported the news in its 10-Q filed with the Securities and Exchange Commission Friday.

Sports Club lost $5.62 million for the third quarter and $14.68 million for the nine months ended Sept. 30. The company also lost money in 2002 and 2003.

The Los Angeles-based company said it will have to either sell assets, sell more securities, increase membership levels to bring in more money, cut costs or some combination of these alternatives in order to make the March 15, 2005 payment on its notes.

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