Carers UK Forum

Care home group Four Seasons are offering 24 homes worth £136m to a lender willing to cover debts.

Care home group Four Seasons is to go to its creditors this month in the hope of striking a deal over debts threatening its survival.

The chain looks after about 17,000 elderly and vulnerable people in about 335 care homes and 25 hospitals, but its owners have warned that they are struggling under £525million of debt and facing interest payments of more than £50million a year.

Terra Firma, the private equity group which owns Four Seasons, wants to hand lenders a 20 per cent stake in the group in the form of 24 homes worth £136million in return for debt refinancing and bypassing December’s interest payments.

The restructuring comes amid growing alarm over financing in the care home sector, with many owners complaining of underfunding from the Government.

Four Seasons chairman Robbie Barr has said: ‘A capital restructuring is needed to ensure the long-term stability of the business. The proposal will provide certainty for our residents, patients and thousands of colleagues who deliver care across the business.’

A Four Seasons Health Care home is a real home. We really care about people, looking after their health and understanding what makes them happy.

Our care homes are as individual as our residents, but the high standard of care is the same throughout. Our new Quality of Life Programme is a unique way of listening to residents every day to help us deliver the type of care experience they want.

Chris From The Gulag wrote: ↑

Mon Nov 06, 2017 12:38 pm

Money Mail ... part of the Daily Chuckle ... for this one ...


Spoken like a true representative of a ... charity ?

Yep , you guest it ... another " Business " masquerading as a charity.

I wonder what the Charity commissioners have to say about that ???

The squeeze on funding has put Four Seasons’ owner Terra Firma in a bind as it tries to meet annual costs of about £110m a year.

The buyout group, led by well-known dealmaker Guy Hands, bought Four Seasons in 2012 from Royal Bank of Scotland for £825m in a debt-fuelled takeover. Most of the takeover cash was borrowed using two loans sold on to investors – one worth £350m and the other £175m.

City financier Guy Hands loses £450m after failing to turn around struggling care home Four Season.

City financier Guy Hands is in line to lose £450million as his efforts to turn around struggling care home Four Seasons look set to end in disaster.

The 58-year private equity baron is ready to hand over control of Four Seasons to creditors as it battles £525million debts.

It comes as the Paradise Papers investigation revealed how he hoped to extract millions from the firm by charging it sky-high interest rates on a loan.

However, it appears that no money was ever received from Four Seasons, and now, with a giant interest payment looming in December, he seems ready to step away from the investment.

Hands’ Terra Firma private equity group took over Four Seasons, which houses 17,000 elderly residents in 335 homes, in 2012 for up to £850million.

While he is now nursing heavy losses, documents leaked as part of the Paradise Papers show he hoped to make hundreds of millions from the firm via a £220million loan to Four Seasons at an interest rate of 15 per cent.

The loan, to be repaid in 2022, was granted to the care home shortly after Hands snapped it up in 2012.

If repaid in full the total bill would have been around £890million – more than four times what Four Seasons borrowed. But Four Seasons hit financial difficulties amid cuts in Government funding and other problems, and this month warned it may not be able to pay its debts.

Terra Firma has invested about £450million – which was mostly written down in 2015.

Terra Firma has invested about £450million – which was mostly written down in 2015.

Discussions around what constitutes NHS healthcare and what constitutes social care can be traced back to the original post-war legislation that separated responsibilities for health (the NHS Act 1946) and (the National Assistance Act 1948).

This statutory separation has been maintained ever since and in many ways it is artificial and not helpful to the person in need of care. Integration is regarded as the way forward.

Four Seasons care homes' chain set 'to be shut' if deal fails to save it from crippling £525m debt

The care homes’ chain has 17,000 beds across 324 homes
It is in talks with creditor H/2 Capital Partners to defer the interest, and cut debt
But talks appear to have stalled and an interest payment is due on December 15

Four Seasons is 24 days away from being potentially banned from taking on any elderly residents unless it strikes a deal over its debts.

The care homes’ chain, which has 17,000 beds across its 324 homes, owes £525 million and has warned it cannot afford to pay a £26 million interest payment due on December 15.

It is in talks with key creditor H/2 Capital Partners, the US hedge fund, to defer the interest, and cut debt.

But talks appear to have stalled and if it misses the interest payment on December 15, the Care Quality Commission could step in and prevent it from taking on new residents.

The fate of Four Seasons now hangs in the balance amid the bust up between British financier Guy Hands, who runs the chain’s owner Terra Firma, and the boss of H/2 Capital Partners, Spencer Haber.

H/2 Capital Partners, which owns most of Four Season’s debt, has put forward a plan under which it would cut debt in return for control of the business.

Terra Firma has said it likes the deal. But the pair are battling over whether an extra 24 valuable care homes should be added to the chain of 324 being handed to Terra Firma.

A paperwork mistake has led to H/2 believing it should be entitled to the homes, while Terra Firma disagrees.

The High Court is due to rule on the case next year.

The row appeared to deepen yesterday when H/2 accused Four Seasons of rejecting its restructuring plan. It also urged it to accept its offer to defer interest payments.

Four Seasons’ owners insisted they had been working with the hedge fund to defer the payments while negotiations continue.

Care home provider under threat as Labour attacks 'profit-first' firms.

Four Seasons Health Care, which looks after 17,000 residents, could go into administration after talks are derailed.

Labour has criticised the role of high finance in social care, as it emerged that a US investment fund could make hundreds of millions of pounds if Four Seasons Health Care, which looks after 17,000 elderly and vulnerable people, goes into administration.

Concern for the survival of Four Seasons is mounting as talks aimed at staving off a collapse were derailed by haggling between private investors over its most profitable care homes.

Four Seasons, owned by private equity group Terra Firma, has said it cannot honour a £26m debt payment due on 15 December, triggering rescue talks with US investment firm H/2 Capital Partners, which owns most of the group’s £540m debts.

Both sides have put forward separate proposals that would postpone the debt payment and stave off administration, but they disagree over the ownership of 24 profitable homes.

Terra Firma, owned by multi-millionaire investor Guy Hands, repeated an offer to hand over the keys for a nominal fee to H/2 Capital Partners but said the US firm had refused to engage, even going so far as to block its emails.

H/2 says it has offered to forego the debt while the dispute over the 24 profitable homes is resolved through the courts.

But two sources familiar with the situation said H/2 attached conditions to the debt freeze offer that made it impossible to sign, making an administration more likely.

H/2 paid around £260m at a discount rate for the debt it holds and has collected around £50m in interest payments from Four Seasons so far.

In the event of administration, or even before, it could sell the bonds it holds, with vulture funds that specialise in buying up distressed company debt likely to be interested.

Sources close to the situation said this could result in a profit of hundreds of millions of pounds, leaving administrators to secure a future for Four Seasons’ less profitable homes, understood to number between 60 and 70 out of 343.

Shadow minister for social care Barbara Keeley said: “This dispute is symptomatic of our fragmented care home sector, where companies put profits first and the care of thousands of vulnerable residents and the jobs of hardworking care staff are left hanging in the balance.

“Given the frequency of warnings from the care sector about the likelihood of major provider failure, the Tory government needs to come forward with plans to reassure residents that they will not be left without care following any restructure of Four Seasons by ensuring local authorities have the resources to meet their statutory duties.”

A Department of Health spokesperson said the Care Quality Commission was monitoring the financial stability of social care providers, adding that “if services stop, the law means local authorities will step in to protect individuals receiving care”.