The struggling care provider Four Seasons has today signed a deal with a hedge fund which will see £70m invested to enable it to keep operating.
Four Seasons Health Care, one of the largest private social care providers in the country, has been struggling to stay afloat amid the ongoing social care crisis.
Its estimated net debt stands at around £525m.
The US-based hedge fund H/2 Capital Partners today agreed to increase the company’s term loan from £40m to £70m.
Four Seasons, which runs over 300 care homes with 17,000 residents, remains in the formal control of Terra Firma Capital Partners.
However, last December H/2 agreed to defer a £26m interest payment which gave it effective control over the company.
Today’s deal means the hedge fund has even more control over the social care provider.
It is likely a full restructuring plan will be agreed in March, which will see H/2 take full control of the chain.
‘We are very appreciative of H/2’s willingness to consider expanding its already substantial commitment to Four Seasons Health Care and for the continued support of all parties in pursuit of a consensual agreement,’ said Four Seasons chairman Robbie Barr.
‘Working together to close the facility over the next two to three weeks, we believe that this incremental liquidity and initial steps toward a revised governance structure lay the foundation for a consensual restructuring that benefits all stakeholders, and in particular provide continuity of care for our residents.’
According to recent Care Quality Commission (CQC) inspection data, out of 167 Four Seasons homes, 35% were rated as ‘inadequate’ or ‘requiring improvement’.
Four Seasons is not alone. Central Government cuts have led to social care spend by councils being dramatically slashed, which has impacted upon private care providers.
Recent analysis by the consumer watchdog Which? recently revealed half of England’s large care home providers have at least one in four failing homes in their network.