Hundreds of care homes at risk.

business: Operator could collapse into administration over debt

One of the country’s biggest care home operators, which has sites in Courier Country, looks to be heading for administration.

Four Seasons, which runs care homes in Newport-on-Tay, Forfar, Perth, Kelty, Cupar, Kirkcaldy and Dunfermline, is understood to be facing a debt of £525 million.

The firm, which is owned by Terra Firma, now looks set to miss a critical interest payment due next Friday.

If this does occur, it will cast a shadow over the future of its 343 care homes and 17,000 elderly residents across the UK.

Should Four Seasons collapse into administration, it would be the biggest care homes failure since Southern Cross in 2011.

American hedge fund H/2 has claimed it is ready to take control of the care homes.

A spokesperson for Terra Firma said: “There is no reason to put Four Seasons into administration.

“We call on H/2 capital partners, who have acquired their debt at a discount since 2015, to stand by its commitment to find a consensual outcome for the benefit of employees and residents and head off the risk of the obvious disruption that administration would trigger.”

It is understood that H/2 bought its debt holding in Four Seasons for approximately £256 million, while the enterprise value of the care operator is thought to stand in the region of £700 million.

H/2 has already received debt interest payments of £50 million, meaning that, were the hedge fund to sell the group or its debt on, as some industry experts expect, it could profit to the tune of £494 million.

Terra Firma bought Four Seasons for £825 million in 2012 and stomached a £450 million write-down on its investment two years ago.

Four Seasons has seen its financial performance deteriorate in recent years. It is said to have been stung by a cut in local authority fees, rising costs and the introduction of the national living wage.

The care home provider employs around 20,000 staff at its sites across the UK. It provides long-term nursing care and has a dementia care framework.