Private equity firm Terra Firma has urged the main lender to Four Seasons Health Care one of Britain’s biggest care home operators to accept a debt restructuring offer in plea aimed at stopping the business from becoming insolvent.
The healthcare group has said it is unable to honour a £26m debt payment due on 15 December, leading to rescue talks with US investment firm H/2 Capital Partners, which owns most of the group’s £540m debts.
Terra Firma, run by Guy Hands, has offered to hand over Four Seasons Health Care’s 343 care homes to lenders H/2 Capital Partners and other bondholders with immediate effect “for a nominal sum” so that problems for the care home group don’t worsen.
However, lenders H/2 has said it has offered to waive the debt while the dispute over the 24 profitable homes is resolved through the courts. These homes, according tio Terra Firma are not part of Four Seasons. A legal hearing on the issue is due next year. Terra Firma bought Four Seasons Health Care in 2012, however, the company has struggled with high-interest debts, leading to an estimated £450m in losses from the investment.