The owner of Four Seasons Healthcare has dismissed claims it will be forced into new ownership as it struggles with the rising costs of nursing care and the burden of its debts.
Four Seasons, which is currently in the process of shutting down a 54-bed home care home in Turriff, denied “speculation” that one of its lenders was considering a debt-for-equity swap that would see control shifted away from its venture capital firm owner, Terra Firma Capital Partners.
Claims emerged that one of the firm’s lenders, HCP, a New York-listed property investment trust, was pushing for a restructuring of the company’s £500million debt pile.
It comes in the wake of Terra Firma, controlled by billionaire financier Guy Hands, hiring Wall Street advisers PJT Partners to work with its creditors to improve its “financial flexibility”.
Mr Hands’ firm acquired the healthcare business in a £825million deal in 2012. In recent years it has been hit by an average 5% decline in payments from local authorities for care as well as a national shortage of nurses. This has forced the firm to hire agency nursing staff at a cost of two to tree times higher. It also faces the effect of the implementation of the “living wage” next year.
Four Seasons has insisted that it has sufficient cash to ensure the safety of thousands of its elderly and vulnerable customers.
In a statement it said: “The group has sufficient medium term financial flexibility. We can envisage no scenario that would have any effect on the quality of care for the residents living in our homes, or patients in our specialist care units.”
It added: “No discussions have taken place with any of the lending banks or debt holders with regard to a debt-for-equity swap on connection with Four Seasons and no such conversations are contemplated at this time.”
The closure of Turriff Care Home is not thought to be the beginning of a large scale closure programme for the firm, which runs in excess of 400 homes throughout the UK.
Sources close to the firm said the closure was a “normal portfolio adjustment” when dealing with underperforming homes. When the company confirmed the closure of the home in June, it said had struggled to maintain staff of the “right calibre”.
Four Seasons said the home’s 30 residents would be “supported to find suitable alternative placements with no disruption to their care”.
The closure came after another home, Glenesk, run by rival firm Renaissance, shut down leaving the Turriff area without an independent care home .