Town Sports to Amend Term Loan Facility
Town Sports International Holdings announced that it is soliciting lenders to participate in an amendment to its senior secured credit facility to borrow up to an additional $75 million.
The company expects the facility to be arranged by Deutsche Bank Securities. Town Sports intends to use the new facility to pay a special one-time cash dividend to its stockholders in an aggregate amount of approximately $92 million, or approximately $3.75 per share.
If Town Sports is unable to obtain the amendment, it still intends to consider a one-time cash dividend. Based upon the company’s current cash balances, restrictions contained in its senior secured credit facility and other relevant factors, in the absence of such amendment, the company currently expects any such dividend, if declared, to be in aggregate amount not to exceed $30 million, or approximately $1.20 per share.
Town Sports seeks to close the new borrowing during November 2012 and to pay the cash dividend to its stockholders in December 2012.
New York-based Town Sports International Holdings owns and operates fitness clubs in the Northeast and Mid-Atlantic regions of the United States and three clubs located in Switzerland.