Derrimut 24:7 Gym chain’s $40m debt revealed as administrators field offers
Popular fitness chain Derrimut 24:7 Gym’s collapse has left creditors facing over $40m in debt, with administrators now sifting through multiple rescue offers.
The staggering $40m estimated debt burden of failed fitness chain Derrimut 24:7 Gym has been revealed, with the administrator now wading through several offers to save the business.
The founder of the popular debt-riddled chain, Nikolaos Solomos, handed over control of his various businesses earlier this month to administrators just days after losing a lifeline deal with billionaire Adrian Portelli.
Insolvency expert Stephen Dixon of HM Advisory has been appointed to Derrimut Gyms which includes three companies – Derrimut 247 Gym (VIC), Derrimut 247 Gym (SA) and ACN 139 283 104 – the trustee of the Solomos Family Trust.
A HM Advisory spokesman said debts were estimated to exceed $40m, with the administrator expected to provide a more definitive figure as he prepares for a potential rescue deal proposed to creditors or a sale of the companies’ business and assets.
They confirmed more than 10 parties had lodged an expression of interest for the purchase of the business and assets of the Derrimut Gyms.
“No details of the interested parties can be disclosed as they are in the process of signing confidentiality deeds,” they said.
The gyms will continue to operate as normal for now, while Mr Dixon investigates the company’s financial position and the implications for creditors and other stakeholders.
The first creditors’ meeting was held on Monday, where attendees were updated on the companies’ financial affairs and the status of ongoing trading.
The creditors in attendance formed a committee of inspection – a small group that helps oversee the administration – with 10 members nominated.
On Monday Mr Dixon was also appointed as administrator of an additional seven entities of the Derrimut Group.
It’s understood these businesses included Mr Solomos’ health food company, Derrimut Nutrition Bar.
Derrimut, which has over 25 locations across Victoria and South Australia, was facing serious financial trouble with the tax office seeking to wind up the company over a $12.53m debt.
Adelaide branches have been abruptly closed over the past few months due to alleged unpaid rent, forcing some members to leave mid-workout. A branch in Shepparton, Victoria, has also recently shut its doors.
Mr Solomos is well-known for his active social media presence, where he frequently shares updates about his businesses alongside his passion for luxury cars.
News Corp revealed last month that a Melbourne wholesaler had also launched legal action against Mr Solomos and his nutrition bar business over close to $150,000 in alleged unpaid debts.
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Originally published as Derrimut 24:7 Gym chain’s $40m debt revealed as administrators field offers
