Jobs under threat in Northampton as Virgin Active and NCP seek restructuring deals

Both firms have been hit hard by lockdown losses

Thursday, 6th May 2021, 3:51 pm
Updated Thursday, 6th May 2021, 3:52 pm

Staff at two Northampton gyms and one car park are sweating over two court rulings which could lead to job losses.

Reports by Sky News say Virgin Active — which has health clubs at Riverside and Collingtree Park — is facing opposition from landlords to a restructuring plan which would involve slashing rents.

A court ruling on the so-called Part 26A proposal could be made as soon as this week and sources say Virgin Active could collapse into administration if the plan is blocked.

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Jobs are under threat at two Northampton gyms and St Peters Way car park

The company's majority shareholder, investment giant Brait, has signalled it will not inject more cash without the restructuring.

Insolvency experts and lawyers are watching the case closely believing it could herald a wave of similar plans.

NCP, the car parks operator, has already announced that it wants to pursue such a financial reorganisation following an 80 per cent drop in revenue during the lockdowns.

The company, which operates more than 500 sites — including St Peters Way in Northampton town centre, will put its propsals before a court hearing on May 28.

Owners, listed Japanese operator Park24 and the Development Bank of Japan, intend to plough in £120million over two years — but only if the plan to slash rents is approved.

The British Property Federation opposes NCP's plan, calling it a 'signal' to businesses they can 'walk away from debt owed to property owners' if approved.

Property owners will be forced to write off millions of pounds in rent arrears and agree to future reductions if the restructuring is approved.

Virgin Active and NCP plans follow a glut of controversial company voluntary arrangements in recent years, which have been used by retailers such as Arcadia Group, Debenhams and New Look.

Virgin Active saw 100,000 members leave while gyms were forced to close for around eight months of lockdown during the last year.