20 health clubs to reopen after US$2.1 million bail out
Print Edition
TWENTY of the Congen Massage Healthcare Clubs that closed over the National Day holiday due to financial difficulties are set to reopen for business today.
The move comes after new owner Shanghai Kuailu Investment Group announced it had completed a cash injection of 13 million yuan (US$2.1 million) into the ailing business, STV reported yesterday.
All of the outlets will honor the prepaid membership cards previously sold to customers, said Kuailu President Bi Yue.
“We’ve paid out more than 5.5 million yuan in salaries to 680 frontline workers,” she said, adding that the rest of the money will be used to cover rent and utility payments.
“In about a week’s time, we will provide another 30-plus million yuan to cover salary payments for the remaining 1,000 employees, and the rent and utility expenses of a further 30 troubled outlets,” Bi said.
The whole acquisition and restructuring process should be completed by the start of next month, she said.
About 10,000 members of the health club chain were left in the lurch earlier this month when 50 outlets in Shanghai closed or stopped accepting membership cards. Reports claimed the company had debts of 300 million yuan.
Under a takeover deal, Kuailu promised an initial injection of 60 million yuan into Congen, with a pledge to tackle its remaining debts over the next three months.
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