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Bally Total Fitness to pay forbearance agreement consent fee to 10½% noteholders
By Caroline Salls
Pittsburgh, May 10 - Bally Total Fitness Holding Corp. has agreed to pay a one-time cash consent fee of $1.25 per $1,000 principal amount of notes to holders of its 10½% senior notes due 2011 that execute a limited waiver and forbearance agreement by 5 p.m. ET on May 14, according to a company news release.
Bally said holders of roughly 80% of its 9 7/8% senior subordinated notes due 2007 have agreed to execute a similar forbearance agreement without any consent payment if forbearance agreements are executed by a majority of senior noteholders.
As previously reported, the waivers relate to the company's inability to file its 10-K annual report for fiscal 2006 and 10-Q for the first quarter of 2007 with the Securities and Exchange Commission and to Bally's non-payment of interest on its senior subordinated notes, both of which constitute defaults under the notes indentures.
Under the proposed agreements, noteholders will waive the defaults and forbear from exercising any related remedies until July 13.
A forbearance agreement with the company's lenders requires similar agreements to be in place with holders of a majority of the senior notes and at least 75% of the senior subordinated notes by May 14.
Bally is a Chicago-based fitness center operator.
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