12.02.18
Major UK care provider receives £70m lifeline loan
Four Seasons Health Care, one of Britain’s largest care home operators, has been given a £70m lifeline to keep services running in the face of a deteriorating financial situation.
The company, which runs around 300 homes across the country, has an estimated net debt of more than £500m and has been struggling in the face of the rising social care crisis.
Last week, H/2 Capital Partners, a US-based hedge fund, has offered an increased loan of £70m to keep Four Seasons afloat – nearly double the original loan it was offered last year.
The move means H/2 will have a significant amount of control over the care operator, although it already owns most of the company’s debt.
Four Seasons care homes house around 17,000 patients, meaning any failure of the company could leave local authorities with a substantial number of potential new residents to support, a similar situation to the recent liquidation of Carillion.
Bosses at the firm have thanked H/2 but say further plans to give the company firmer footing are still in discussions.
“We are very appreciative of H/2’s willingness to consider expanding its already substantial commitment to Four Seasons Health Care and for the continued support of all parties in pursuit of a consensual agreement,” Four Seasons’ chairman, Robbie Barr, commented.
“We believe that this incremental liquidity and initial steps toward a revised governance structure lay the foundation for a consensual restructuring that benefits all stakeholders, and in particular provide continuity of care for our residents.”
Terra Firma, the company which currently runs Four Seasons, is in talks with H/2 to reach a complete restructuring programme allowing the American hedge fund to take full control.
The news is of particularly importance, as it follows last week’s warnings from the National Audit Office (NAO) that the government is not doing enough to secure a sustainable adult social care workforce in England.
In a report released on Thursday, the NAO called the situation a “ticking time bomb” and cautioned local and central government over an increasingly high turnover of staff across the UK.
Have you got a story to tell? Would you like to become a PSE columnist? If so, click here.