Date
16 December 2017
California Fitness, which has closed all its branches in Hong Kong on Tuesday, has about HK$16 million in cash, far short of its average monthly operational expenses of more than HK$50 million. Photo: CNSA
California Fitness, which has closed all its branches in Hong Kong on Tuesday, has about HK$16 million in cash, far short of its average monthly operational expenses of more than HK$50 million. Photo: CNSA

California Fitness in talks with four investors

Cash-strapped gym chain operator California Fitness is in talks with four potential investors to try to avoid liquidation, government broadcaster Radio Television Hong Kong reports, citing court proceedings.

The company closed all its branches in Hong Kong on Tuesday.

Three of the potential investors are from Hong Kong and one is from the mainland, the High Court was told.

Wong Ping-kuen, a former shareholder of California Fitness, is seeking to get the company liquidated. But no details about the potential deals were disclosed, RTHK said.

The High Court was also told that the fitness chain has incurred huge losses in the past two years.

It is said to have about HK$16 million in cash, far short of its average monthly operational expenses of more than HK$50 million.

Wong’s lawyer said the company owes him about HK$7 million for renovation work at several of the gyms.

He bought the chain in December last year for HK$50 million, and sold it to his elder brother, Wong Lun, for HK$30 million in May.

The creditor’s lawyer told reporters after the hearing that Wong Lun does not oppose the liquidation.

But they hope that someone can take over the chain, or at least the branches that are still profitable.

California Fitness currently has 64,000 members and more than 700 workers.

The court has scheduled another hearing for August 31.

– Contact us at [email protected]

RA/CG

EJI Weekly Newsletter

Please click here to unsubscribe