Four Seasons care home group urged to strike deal over its debts

The future of over 300 care homes and 17,000 residents hangs in the balance as Four Seasons, one of the biggest care home groups in the UK, struggles to cope with its mounting debt.

The care home group, Four Seasons, which is majority owned by private equity firm Terra Firma run by Guy Hands, has confessed it will be unable to pay a £26m interest repayment on its £525m debt.

One of its creditors, H/2 is currently in talks with Four Seasons over deferring the interest payment and is pushing the care home group to sign an agreement on finalising the deferral.

A spokesman for the US hedge fund, H/2 Capital Partners, said: “Four Seasons has publicly stated that it no longer has adequate financial resources to be able to meet its interest payments on 15 December.

“To ensure continuity of care for residents and the stability of the Group's operations, H/2 voluntarily proposed a deferral of those interest payments, providing the Group with a written deferral agreement two weeks ago.

“H/2 urges the Group to finalize the interest deferral to ensure its own stability and to provide sufficient time to formulate new alternatives for its orderly restructuring.”

H/2 expressed concerns over the lack of a response by Four Seasons and added that it believed the proposal had been rejected.

However Four Seasons claims it has not dismissed the proposal and talks are ongoing.

H/2's proposal encompasses a ‘large new infusion of equity and a substantial debt-for-equity swap’.

A spokesman for Four Seasons said the care home group “welcomed key aspects of H/2’s proposal” and said it has “been working with H/2, via its advisers, to put in place a deferral and forbearance agreement while the financial restructuring continues”.

Four Seasons also reiterated that it has “not rejected any proposal, and has been clear that any proposal along the lines proposed by H/2 can only be executed with an agreement on terms by both the equity and the debt holders”.

“We understand that this agreement does not currently exist.

“Whilst conversations continue between stakeholders, the focus remains on providing high quality care to our residents and patients working closely with the Care Quality Commission and other national regulators in order to ensure that day to day operations continue unaffected.”