In a statement released at lunchtime Wednesday, Wahoo Fitness says it has found a way to eliminate all of its debt.
The statement, shared via press release, claimed that the brand has “fully recapitalised its business” courtesy of “significant equity support from new and existing investors”.
The move comes just a month after the company’s credit rating was downgraded to ‘D’ – described by S&P as a “payment default on a financial commitment or breach of an imputed promise; it is also used when when the bankruptcy petition has been filed”—a payment after default on; This is its third consecutive credit rating downgrade in less than 18 months.
Interestingly, the terms of the arrangement are being kept confidential, so it’s unclear how Wahoo managed to pull off the feat. Whether it sold shares or followed Rafa’s recent steps by participating in a debt-for-equity exchange (opens in new tab) is, unfortunately, between Wahoo and its creditors.
However, the brand claims that the new financial position now positions the business to “innovate and grow” and expand its “prominence in driving innovation across the global smart fitness and training category”.
At the time of that recent credit-rating downgrade, the broad trend among investment advisors’ analysis was that, while Wahoo would need restructuring, the brand position and its product lineup were strong enough for the company to survive. “Wahoo benefits from its strong market position in the cycling and smart fitness products market, supported by its good brand recognition, product innovation and high product quality,” said US consultant Moody’s.
This sentiment is echoed today by the brand’s founder, Chip Hawkins: “The investment from both new and existing investors is a clear sign of belief in Wahoo’s strength. Especially our team, brand, strategy and powerful ecosystem of innovative products, software and services.”
As for the future, CEO Mike Saturnia said that “the successful recapitalization of the business provides the flexibility we were seeking as a management team to allow investment in innovation and growth from the company’s substantial foundation and category leadership position.” could,” adding that the brand now has a renewed focus on “delighting its customers”.