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Councils and the Government are watching to see if a care home chain, with debts totalling £1.5bn, is able to restructure its finances. The Four Seasons Health Care group, which has a raft of local authority contracts, has told the City it has been given an extended deadline of 22 July to restructure its finances. Its existing agreement expired on 22 January. The group manages more than 400 care homes and provides care to around 21,000 people across the full spectrum of services, from older people to children, and people with mental health problems. At its core are contracts with local authorities and PCTs, as well as private care involving individuals. The company, which has been in negotiations since August, is understood to be working with 35 lenders to restructure its debt. Its biggest lender is troubled Royal Bank of Scotland (RBS), which is understood to have now set a deadline of July to resolve its current difficulties. Problems began in August last year when its previous owner, the Qatar Investment Authority, broke off negotiations. Should current negotiations stall, creditors could push the firm into insolvency, leaving the Government with the nightmare of not only handling another business collapse but ensuring the care of thousands of vulnerable people continues. Department of Health officials have privately voiced concern over a series of City deals, mainly by private equity groups buying care home groups at the height of the boom. A company spokesman said it was confident an agreement could be reached, and that it remained profitable. ‘The group is hopeful that its proposal will attract support from the lenders,' he said. ‘Admissions to the group's care homes in the year were at record levels, and occupancy has increased throughout the year.'

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BUSINESS

Care home finance deadline extended

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