Care Homes : Complete With Residents For Sale : Sector News / Closures / Scandals

Discuss news stories and political issues that affect carers.
Money Mail ... part of the Daily Chuckle ... for this one ... as if they were mere " Under performing " assets ?


http://www.dailymail.co.uk/money/invest ... -136m.html


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.


Parent company ... private equity outfit operating across several countries ... linked to Southern Cross a few moons ago ... 10% earmarked for charity each year ... appear to be respectable ... on the surface ...
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 ???
Chris, much as I appreciate your sharing of caring related news stories, I would suggest you take more care 're facts as opposed to opinion. This particular company is not a charity and does not purport to be one. They are not a registered Charity so the Charity Commissioner would not be involved.
They may provide social care, what used to be known as 'charitable 'works but that is very different to "masquerading as a Charity. " which is a dangerous claim to make, could even be taken as libellous

I have no connection with them, and hadn't heard of them until your post, but it took only a few seconds to check them out.
I know you are passionate about the state of caring, please be careful and don't let your passion get you into trouble

Kr
MrsA
Thanks Mrs. A ... I have corrected the conclusion , and added some information on the parent company to deaden the impact of the figures quoted ... an arm with problems but under the wing of an ( Ultimate ) parent with more interests across the sector over several countries.

Immediate parent being a private equity entity , uk arm registered as a private limited company ... no known charity status.

As per usual practice with private equity firms , gearing is a major consideration whenever they invest when deciding the likely return on capital employed. In this specific case , the intial gearing assumption appears to have been a little too optimistic when based on the subsequent performance of the enterprise.

Same criteria for any venture ... charitable or otherwise.

Hence , the drastic measure to bring some balance back to said enterprise.

An quote from an article in the Independent , almost 2 years ago :
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.


If the parent company cannot complete the new deal , what is the future for these care homes and their residents ???

As for their parent , details are unavailable without carrying out a fee paying search.

As for passing the buck , it stops with the Government ... starve the LAs and social care , a major undertaking , will suffer as a direct result.

Closure / selling of care homes is part of the fallout we are seeing across the country.

Some irony here ... if the Government turn the tap back on , many private enterprises will also benefit ... assuming the LAs will increase their portion of funding to the care home sector.
More on the Four Seasons theme ... or should that now be debacle ?

http://www.dailymail.co.uk/money/market ... fails.html



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.



Well , that's one cash cow that didn't produce any ?

Structure ... typical with private equity funds.

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


If offshore , normally used to ensure future income is tax free ... offset against the loss ... which may or may not be accurate ... switching assets between arms of the same business produces the same result ... minimising future tax ... for a loss than may exist ... on paper.

More importantly , what of the care home residents ?
Are there ANY council-OWNED and council-RUN care homes any more?
Not if a certain poitical party had it's way.

Even now , many academics see the way forward as recombining the NHS and social care.

A problem created when the first link between the two was severed ... exact date unknown but many years ago ?

Little snippet borrowed from the Community Care site :

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.


Cradle to the grave ... now cradle only ( Provided no shortage of midwives ? ).

I would agree with the merits of that idea.

Care ... whether medical or social ... back where it belongs.

One " Slight " problem ?

A huge chunk of social care provision is now in the hands of the private sector.

Like vultures , feating on the meat until only the bones are left.

What then ?

Return what's left into public ownership ?

A potential meltdown ... a question of WHEN and not IF ?
An update on the Four Seasons story ... or should that now be a debacle ?


http://www.dailymail.co.uk/money/news/a ... -shut.html

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.


COMMENTS SECTION ... highly recommended ... a first for the Daily Chuckle ?

The flight of private capital ... if it cannot earn enough ?

Question ... what is it doing in the care home sector in the first place ?

To earn an acceptable return is the correct answer.

Care ? That's a secondary consideration.

Now , the residents are paying the price.

How many more out there in private hands ?
More on the Four Seasons debacle ... today's Guardian :


https://www.theguardian.com/business/20 ... are-group.

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”.

Administration ?

Auction off the contents ... thousands of elderly citizens sold on the fall of a hammer ?

Oh dear , you couldn't make it up ... ?

Madness , sheer madness.

Money ?

Is that all that's important to those with a surplus of it ???
Jenny

Our local council in Scotland hass closed two of their care homes this year and have demolished them, probably to sell the land for private housing. There are only a handful of council run care homes in this area, the rest being private owned Nursing homes. They are lovely but very expensive and the council are digging their heels in regarding allowing non-self funding patients being admitted to these homes.

I was told that their social workers have been told that every effort is to be made to keep patients in their own homes with council carers coming in, regardless of the stress it puts on their families. Their own care department is struggling to provide the carers required to cover all their clients. The council recently published a list of possible cutbacks in services. I am just waiting for cutbacks in care to be announced.
Irene - it seems to me that if Jeremy Corbyn wants more than the youth vote (eg, by promising to scrap student loans and cancel any already taken out!!!!!), then he could win over the entire middleaged/old vote by promising to rebuild and reopen COUNCIL residential homes.......

I also think that ANY politician who DARES to say 'we should look after our old folk ourselves' should be FORCED to spend a month looking after an incontinent, bedbound, totally incapacitated 90 year old with advanced dementia and SEE HOW LONG THEY LAST!!!!!!! (ie, before they run screaming to the nearest care home and begging them to take in the person!)