Derrimut 24:7 Gym founder Nick Solomos has appointed administrators to the largest company within his floundering fitness empire, just days after billionaire businessman Adrian Portelli backed out of a lifeline deal.
Employees were informed on Thursday in an all-staff missive, seen by The Age, that stressed that it was business as usual for the gym chain, which is estimated to have racked up a near $30 million debt pile.
Nick Solomos placed a key company within his Derrimut 24:7 gym empire into administration on Thursday. Credit: Eddie Jim
“This decision was not made lightly, but it represents a proactive step to give us the best possible opportunity to restructure, protect jobs, and position the business for a stronger future,” Solomos wrote.
All staff will continue to be paid weekly, and members will still have access to all of its 26 gym locations, he said.
Solomos also said a new investor had joined the company to “work closely” with Derrimut throughout the administration process. The identity of the new investor is unclear.
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Stephen Dixon, partner of insolvency firm HM Advisory, has been appointed administrator of the debt-riddled entity, according to documents filed with the corporate regulator.
The Australian Tax Office has been seeking to liquidate Derrimut’s primary operating entity as well as a now-dormant company to claw back $15.4 million in tax debts, unpaid superannuation and penalties.
But last week, the ATO agreed to delay its move to liquidate the entity, allowing Derrimut extra time to settle its mounting debts.
