Care homes in £300m sell-off

Boss insists ‘no price rise’ after Bupa deal

A CARE homes mogul tried to allay fears after sealing a £300million debtfuelled takeover.

Dr Chai Patel insisted there would be “no changes” for staff and residents of 122 homes his firm is buying from Bupa.

The deal will make the company his chairs, HC-One, the biggest care homes operator in the UK. The 122 Bupa homes have around 9,000 residents and 10,000 staff. Patel said all staff would transfer across on the same employment terms.

He also insisted: “Relatives should be sure there will be no price rises.”

His promises come despite the deal being financed with £220m of fresh debt and £80m of new equity. It will take HC-One’s debt pile to around £500m, on which it’s paying a roughly 6% fixed rate of interest over five years.

“We don’t think it is an imprudent level of debt,” said Labour donor Patel.

HC-One was born from the debt-ridden collapse of care homes giant Southern Cross in 2011. The firm stressed that the group owned 85% of its properties, worth £1billion, planned to invest £40m in the new homes, and wanted to boost occupancy rates to more than 90%.

The deal comes despite Patel recently warning a “chronic underfunding” of social care would result in “catastrophic failure” in the NHS. Former pensions minister Baroness Ros Altmann said: “Fears of some care homes being closed or sharp cost increases to improve profitability can cause deep distress.

“Older people are not parcels that can be moved around easily and standards of care need to be maintained or improved.”

Janet Morrison, chief executive of Independent Age, said: “While a takeover of this scale may seem far removed from day-to-day life in a care home, residents and families affected need assurances that the standard of care they receive doesn’t decline.”

The Competition and Markets Authority is investigating the care homes sector.