ENTREPRENEUR Duncan Bannatyne said more jobs could be created at his North-East headquarters after he agreed a £92m deal to clear his company's bank debts.

The Bannatyne Group has sold and agreed a long term leaseback deal on the ground leases at 39 of its health clubs with M&G Investments.

The cash injection will be used to clear bank debts and means the Dragons' Den star will no longer have to pay £10m a year on a loan taken out with Anglo Irish Bank before the lender fell victim to the banking crisis.  

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It is very pleasing to draw a line under this," Mr Bannatyne told The Northern Echo.

"The business has been held back by the time I spent going through my divorce and the bank going into liquidation, which happened one after another. In normal circumstances you could refinance with the bank, borrow money and start expanding. We haven't been able to do that. Now we can."

In 2006, the Darlington-based tycoon borrowed £180m from the Anglo Irish Bank to buy 24 fitness clubs from the Hilton Group. After the bank collapsed it was nationalised by the Irish government in 2009, and liquidators KPMG were called in to recover its debts.

The entrepreneur said being saddled with payments on the outstanding loan of 10m a year had held back his business.

"Clearing this debt improves our cashflow. We might even look at acquisitions and spending money to improve the standards at more of our clubs.

"Our head office (in Darlington) can take lot more people. The way the industry is changing at the moment a lot more joining is done online, so we are seeing people across the industry making redundancies at health clubs because fewer people are joining there. But that means there is more work at head office, so that could mean jobs being created here going forward."

The deal with M&G Investment involves the sale of land and buildings and the creation of new long-term ground lease agreements with the new landlord. The company will retain long-term control of the buildings via secure leasehold interests.  

Mr Bannatyne, added: "This deal has been reached with one of the most successful investment businesses in the world. M&G can see the long-term value of our business and has agreed to be our landlord over a very long lease term.

"Our premium business is successful, sustainable and profitable and we believe it is an ideal tenant to provide M&G's investors with reliable returns."

Nigel Armstrong, the chief executive of the Bannatyne Group, said: "The transaction enables the business to be virtually debt free and will greatly benefit the liquidity of the business, at the same time allowing us to continue to fully control the operation and management of all the health clubs.

"Coupled with the ongoing profits from the business, which have climbed this year, the business has emerged from the economic storm stronger than ever. Innovative thinking and judicious use of business assets give us the future resources to continue to provide customers with fantastic products and service which enhance their lifestyle."

Ben Jones of M&G Investments said: "This is another high quality deal that delivers exactly the sort of investment returns our many pension fund clients need."