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Four Seasons Health Care goes into administration | |
(32 minutes later) | |
One of Britain's largest care home groups, Four Seasons Health Care, has gone into administration. | |
Two of the holding companies behind the firm appointed administrators on Tuesday after struggling to repay their debts. | |
The group serves about 17,000 residents and patients and employs some 20,000 staff. | The group serves about 17,000 residents and patients and employs some 20,000 staff. |
Four Seasons said the move would not affect care arrangements or lead to the closure of homes. | |
Group medical director Dr Claire Royston commented: "Today's news does not change the way we operate or how our homes are run or prompt any change for residents, families, employees and indeed suppliers. | |
"It marks the latest stage in the group's restructuring process and allows us to move ahead with an orderly, independent sales process." | |
According to Sky News, which first reported the news, it is the biggest collapse of a care homes business since Southern Cross in 2011. | |
Four Seasons has struggled with cuts to local authority care fees and rising costs, and has repeatedly warned about its long-term stability. | |
The GMB union said the government needed to step in urgently to reassure Four Seasons staff and residents. | The GMB union said the government needed to step in urgently to reassure Four Seasons staff and residents. |
Rehana Azam, GMB national secretary, said: "The possible collapse of Four Seasons shows our care system is in crisis, it is crumbling beneath us because the funding isn't there." | Rehana Azam, GMB national secretary, said: "The possible collapse of Four Seasons shows our care system is in crisis, it is crumbling beneath us because the funding isn't there." |
Four Seasons said it had appointed professional services firm Alvarez & Marsal (A&M) to handle the administration. | |
While the holding companies - Elli Finance (UK) and Elli Investments - are in administration, the operating companies that run Four Season homes are not. | |
The group said it had secured funding to ensure continuity of care while it seeks a new owner. | |
Four Seasons, which has 322 residential and nursing care homes, has been struggling to restructure its debt pile of more than £500m. | |
Terra Firma Capital Partners, the private equity firm led by Guy Hands, bought the group in 2012 for £825m but has since faced a £450m writedown on its investment. | |
It has also ceded control of the group to US hedge fund H/2 Capital Partners, which holds a large amount of its debt. | |
A number of care businesses have run into trouble recently, raising questions about the current funding model for social care. | A number of care businesses have run into trouble recently, raising questions about the current funding model for social care. |
Last year, Allied Healthcare, which supports 13,000 people, said it was struggling with debts, blaming low fees paid by councils. | Last year, Allied Healthcare, which supports 13,000 people, said it was struggling with debts, blaming low fees paid by councils. |
The Care Quality Commission, a regulator, later issued a notice saying it had serious doubts about the firm's future. | The Care Quality Commission, a regulator, later issued a notice saying it had serious doubts about the firm's future. |
A majority of Four Seasons' operations are funded by the state, with about a fifth of them funded privately. | A majority of Four Seasons' operations are funded by the state, with about a fifth of them funded privately. |