Four Seasons Healthcare agrees debt deal

DEBT-ridden care home operator Four Seasons Health Care this week agreed a £700m+ debt-for equity swap deal with creditors to allow it to continue as an independent business.

The Wilmslow company has been talking to lenders for the last year and has finally a reached agreement on proposals to cut its debts by 50% to around £780m. Had agreement not been reached a formal sale process would have begun.

In a statement Four Seasons said:”Commercial agreement has been reached with the group’s financial creditors for a consensual capital restructuring of the Group’s debt.

“All of the Group’s lenders have confirmed their agreement to the restructuring proposal.”

Under the restructuring proposal, a number of lenders will exchange debt owed to them for an equity stake in the business.

Dr. Pete Calveley, chief executive of Four Seasons Health Care said, “Agreement on the consensual restructuring will give the group a more robust capital structure and represents a major step forward. 

“The remaining debt matures in September 2010 and we will immediately start work on a long term solution. As always, we will continue to be single minded in our attention to improving our service offering and developing our business.”

Four Seasons is one of the largest independent providers of care services in the UK, and owns or operates more than 400 nursing and care homes and specialised care centres.

Despite its financial issues the underlying trading performance of the business has been strong with Ebitda of more than £100m and record occupancy levels.

The group is being advised on its debt restructuring by Talbot Hughes McKillop. Its legal advisers are Macfarlanes.