Four Seasons Health Care Group has entered into a restructuring agreement with its principal bond holder H/2 Capital Partners.
The deal will see ownership of the group transferred to a new owner controlled by its creditors, known as NewCo, which will be capitalised by a combination of cash equity and third-party financing. The deal is due to be completed before 31 July.
As part of the restructure, the group’s existing £70m loan is expected to be repaid in full. In addition, holders of the group’s £350m senior secured notes are expected to receive repayment in full.
The group’s £175m existing loans will remain with Elli Investments Ltd, which will not be transferred to NewCo. Holders are expected to receive a cash payment based on an independent valuation of Four Seasons being transferred to NewCo.
It is hoped the restructuring will provide better stability to ensure continuity of care for the group’s 17,000 residents and patients and its 23,000 workers. H/2’s cash injection will also help improve the quality of the group’s facilities.
Spencer B Haber, H/2’s chairman and chief executive, said: ‘H/2 looks forward to Four Seasons Health Care beginning a new chapter. The restructuring we have proposed is intended to bring enhanced governance, financial stability and equity capital to support the group’s care homes and independent hospitals.
‘At the heart of our plans is our belief that as a responsible private investor, our interests are best served by helping the group provide high-quality care to the 17,000 residents and patients the group is honoured to serve.’
Robbie Barr, chairman of Four Seasons, said: ‘I am delighted that H/2 Capital Partners have developed a solution to the financial challenges that have been facing the group for some time. The board and senior management of the group are committed to taking the steps necessary to support H/2 in their plans as we proceed to finalising the transfer to new ownership.’