Equinox Holdings-এর মালিকানা, যা 1.8 billion dollar costly loan burdened luxury fitness chain, advanced talks for cash infusion and debt refinancing that would reduce its debt and finance an expansion. The talks, between private equity firm Silver Lake and property developer Related, could be finalised in the coming weeks as part of a sweeping refinancing of Equinox’s outstanding debt, according to people briefed on the matter. Though the exact size of the financing was unclear, the transaction was expected to put hundreds of millions of dollars of cash on Equinox’s balance sheet and reduce its debt burden, one of the people added.

Equinox has not been making cash payments on a junior loan maturing next year, rolling the accrued interest into the principal it will ultimately need to pay. With slogans such as “It’s Not Fitness. It’s Life”, Equinox has positioned itself as a high-performance gym for the affluent, with monthly memberships running $350 or more in moneyed locales including New York, London, Los Angeles and Miami.

Despite its top-end appeal, the group has lumbered under a 2024 financing deal from private investment groups, including Sixth Street, Ares Management and Black Rock-owned HPS Investment Partners, which stabilised the business after the coronavirus pandemic and averted a cash crunch but saddled the group with loans at interest rates as high as 16 per cent. The potential cash injection has been greeted with relief from some investors and lenders, with two people briefed on the deal saying it would allow Equinox to dig out from expensive debt that consumed cash and could be used to open new clubs and refurbish existing locations. Equinox’s existing lenders were expected to participate in the debt refinancing, they added.

Silver Lake’s decision to push forward with the capitalisation signals the private equity group is willing to double down on an investment it has held for nearly seven years, a point when many buyout firms are looking to exit a business. Silver Lake and Related earlier this year had sought to tap new third-party investors as part of the capital raise but abandoned those efforts as the war in Iran rattled large sovereign wealth funds in the Middle East, two people added. The technology-focused buyout shop first invested in Equinox in 2020 on the precipice of the pandemic, with plans to help build the fitness chain’s digital offerings so it could compete with the rise of at-home bike maker Peloton.

But the at-home effort largely foundered as gym attendance rebounded after the pandemic and Equinox has instead returned to its upmarket calibration. It runs an upscale hotel in New York’s Hudson Yards, where rooms cost upwards of $1,300 a night, and is at work on a collaboration with the blood-testing group Function to provide what it markets as “biometric analysis and elite training to deliver extraordinary results” to its clients. Debt has shadowed the fitness group for much of its 35-year history.

More than two decades ago, when Equinox counted just 18 clubs, analysts with the credit rating agency S&P Global described the business as having “relatively weak credit statistics . . . mainly due to the company’s aggressive debt-financed growth”. Investors and lenders say the business has improved and that sales at new locations have surpassed expectations. Filings with the Securities and Exchange Commission show that the interest rate on its term loan maturing in 2029 declined at the year’s start, with the spread dropping one percentage point to 7.25 per cent over the floating-rate benchmark.

Investors would nonetheless like to see profit growth and an improvement in cash flows. The principal equity owners include top executives at Related, Silver Lake and the private equity group L Catterton, which has been a minority owner since 2017. Silver Lake declined to comment.

Equinox and Related did not respond to requests for comment.