May 10, 2007 10:57 AM
Bally Agrees to Pay Consent Fee
CHICAGO – Bally Total Fitness announced today that it has agreed to pay a one-time cash consent fee of $1.25 per $1,000 principal amount of notes to holders of its 10 ½ percent Senior Notes due in 2011 that execute a limited waiver and forbearance agreement by 5 p.m. EDT on Monday.
Bally also announced that holders of approximately 80 percent of its 9 7/8 percent Senior Subordinated Notes due in 2007 have agreed to execute a similar forbearance agreement without receiving any consent payment, if forbearance agreements are executed by holders of a majority of the Senior Notes.
The waivers relate to Bally’s inability to file its Annual Report on Form 10-K for fiscal 2006 and Quarterly Report on Form 10-Q for the first quarter of 2007 with the Securities and Exchange Commission on a timely basis and Bally’s non-payment of interest on its Senior Subordinated Notes, both of which are defaults under the indentures governing the notes.
Under terms of the proposed agreements, noteholders will waive the defaults and forbear from exercising any related remedies until July 13, 2007, on terms similar to the recently executed forbearance agreement under the company’s senior secured credit facility. That agreement requires that forbearance arrangements be in place with holders of a majority of the Senior Notes and at least 75 percent of the Senior Subordinated Notes by Monday.
Bally also said in its release today that this announcement is not an offer to purchase or sell, a solicitation of an offer to purchase or sell or a solicitation of consents with respect to any securities. Notwithstanding Bally’s intention to seek waivers from the noteholders, no assurance can be given that discussions with noteholders will result in any agreement favorable to Bally.
Bally's stock was at $0.76 at the end of today's trading on the Pink Sheets exchange.
