Care homes operator Four Seasons strikes last-minute debt deal

Four Seasons, Britain’s secondbiggest care homes operator, has struck a last-ditch deal with its major creditor that staves off the immediate threat of administration.

The group, owned by Guy Hands’ private equity vehicle Terra Firma, is struggling under £525 million of debt and faced a critical interest payment today.

Four Seasons’ board has been racing against time to thrash out a so-called “standstill” agreement with its principal creditor, American hedge fund H/2 Capital Partners.

Yesterday, the care giant confirmed a deal with H/2 has been reached.

“This standstill ensures continuity of care for Four Seasons’ residents and enhances operational stability for employees and all stakeholders,” the companies said in a statement.

It gives the firm breathing space to agree a more long-term restructuring, with H/2 set to take full control of the care homes operator.

“The primary objective of a restructuring plan is to create a sustainable, long-term capital structure that best serves residents, patients and employees,” they added.

However, the details of a longterm restructure still needs to be agreed upon, with a fresh deadline of April 2 being set.

Until it is signed off, the future of 17,000 elderly residents across 343 homes is still in doubt.

Had Four Seasons fallen into administration today, it would have been the biggest care homes failure since Southern Cross in 2011.

Four Seasons chairman Robbie Barr said: “The board and I look forward to working closely with H/2 and their advisers on delivering a restructuring that will provide the right capital structure for the company’s long-term needs.”

H/2 boss Spencer Haber described the standstill as the “first step” toward a successful restructuring to secure the longterm future of the “vitally important care provider”.

The threat of administration came after a spat between Terra Firma and H/2 over the ownership of 24 homes stymied talks.