Care homes ‘to be shut’ if debt deal fails

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 £525m and has warned it cannot afford to pay a £26m 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.