Care homes at risk after rescue talks collapse

STRUGGLING care home operator Four Seasons was hit by a further setback as talks to save the debt-ridden facility broke down just days before it is due to make a £26m interest payment.

Four Seasons Health Care is saddled with around £525m of debt and risks falling into administration if it fails to secure the funds to make the critical payment on December 15.

Further uncertainty surrounding a possible deal now risks the upheaval of 17,000 elderly residents across its 343 care homes. In addition to its residents, Four Seasons has 25,000 employees and hundreds of agency staff.

The owner of Four Seasons, private equity firm Terra Firma, warned that progress was being blocked as the care home’s key lender, US hedge fund H/2 Capital Partners, refused to meet with it.

Terra Firma, which is owned by financier Guy Hands, 58, has been trying to secure a deal that would see H/2 take ownership of Four Seasons and enable it to make the payment.

‘We do welcome a constructive standstill agreement being reached between H/2 Capital Partners and Four Seasons as reported,’ a statement from Terra Firma said.

‘However despite our request to H/2 Capital Partners for a sit down meeting with ourselves and Four Seasons, they have not been willing to meet with us.

‘As we have consistently said throughout this process, we would expect H/2 Capital Partners and the other creditors to whom we handover our interest in these homes for a nominal sum to run these homes responsibly.

‘We do not see any reason why this business should be put into administration.’

The standstill comes as the Care Quality Commission is reported to have intervened, demanding a resolution by Monday.

Former pensions minister Baroness Altmann blamed the Government for failing to intervene in the social care crisis. ‘I am pleased that the CQC has stepped in, but these problems have been allowed to build up for over ten years and the Government has simply stood by as a disinterested observer, she said.

‘Radical reform of social care is urgently needed and the fate of vulnerable elderly people should not be left in the hands of hedge funds playing financial football with their homes.’

Unless Terra Firma manages to secure an eleventh hour deal with H/2, Four Seasons looks set to become the biggest care homes failure since the collapse of Southern Cross in 2011, which put 31,000 residents at risk. Four Seasons’ future has looked increasingly uncertain after H/2 had rejected a proposal put forward by Terra Firma, sparked by a disagreement over the terms of the restructure and over the ownership of 24 homes, which Guy Hands’ firm is trying to hold on to.

Terra Firma said it has sought assurance that H/2 will protect the 24 care homes that it owns, but had received no response.

It said: ‘Given there has been no direct contact by H/2 Capital Partners with Terra Firma for some time, we can only assume that H/2 Capital Partners now accepts our position and is happy to proceed with a standstill on that basis.’