Care homes deal to ease debt pain

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 £525m of debt and facing interest payments of more than £50m a year.

Terra Firma, the private equity group which owns Four Seasons, wants to hand lenders a 20pc stake in the group in the form of 24 homes worth £136m 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.’