North-East Business
Four Seasons denies sale rumours
8:00am Tuesday 21st February 2012
A CARE home group employing hundreds of North-East workers was yesterday fighting off claims of an imminent sale for the third time in as many years.
Four Seasons Health Care, which employs 200 staff at its offices in Lingfield Point, Darlington, and many more at its 62 homes in the region, categorically denied it was up for sale after reports at the weekend that Chinese billionaire Li Ka-Shing, who bought Northumbrian Water last year, was considering a bid.
It was reported that Hong Kong based Mr Ka-Shing, who completed his deal for Durham City based Northumbrian Water in October, was eyeing up Four Seasons through his CK Life Sciences International Holdings division.
It is the third time in little more than three years that Four Seasons has had to fight-off rumours of a sale to deal with its debts.
However it has admitted that seeking new investment is one of the options it is considering to tackle a £780m debt which it is due to repay in September.
"The board and its financial advisers are considering alternative capital structures to ensure that appropriate levels of funds will be in place by September 2012 to match the Group's financing objectives," The company said.
"These include refinancing, new equity from existing shareholders, as well as potential funding from new investors or combinations of these options."
The firm said that its shareholders were supportive and a "high level of interest" was being shown in the group by potential new investors.
"We aim to have an agreement in place by May and concluded by July, well before our debt matures," it added.
It is understood that some existing shareholders have expressed an interest in putting more money into the business and that the firm has already had contact with potential investors.
The latest issue for Four Seasons follows on from a restructuring deal with its creditors in September 2009 that saw the £1.5bn it owed almost halved to £780m in a debt for equity swap.
The agreement was reached following a year of negotiations, complicated by the fact the firm had a complex 11 tiers of debt to 35 creditors with vastly differing stakes in the business, including the Royal Bank of Scotland, Fortis and Nationwide
A year later Four Seasons managed to persuade its creditors to defer payment of the remaining debt to September this year.
On both occasions a sale of the business was mooted as a possible option, although these rumours came to nothing.
Four Seasons became the largest UK operator following the collapse of Darlington based Southern Cross, taking on 140 of Southern Cross's properties, including 10 in the North-East, after last year's crisis.
The company now runs more than 500 care and nursing homes across the UK, as well as a domiciliary care service and retirement apartments in North Yorkshire.
Whatever the outcome Four Seasons is unlikely to go the same way as Southern Cross.
Four Seasons owns most of its homes, while Southern Cross folded in July last year under the weight of crippling rents, resulting from a controversial business model of selling its homes and leasing them back off landlords.
Northumbrian Water is now run by UK Water, a firm belonging to Cheung Kong Infrastructure Holdings (CKI), based in Hong Kong.
CKI is run by Mr Ka-Shing, who has an estimated personal fortune of £16bn.
Ahead of its takeover CKI told Northumbrian staff, with 936 workers at its head office and 2,884 in total, that their jobs are safe and that the firm will continue to operate from Pity Me.