10/10/11

Private nursing home chain collapse - and now more?

Southern Cross, the giant, for-profit British nursing home chain that failed in July, has now begun to transfer its homes to other operators as it winds up its own operations.

It announced in late September that the first 250 of its 752 homes were being transferred to new operators and that it hoped to transfer more in October and November. It claims that it has entered unconditional business purchase agreements for 70% of its homes, with the remaining 30% still in progress.

But another for-profit corporation, Four Seasons, which hopes to take over 140 of the 752 homes, is now itself having to refinance its operations. It's currently in discussions to refinance hundreds of millions of pounds in debt.

The union, GMB, has called on the Care Quality Council to investigate, arguing tha
t "Four Seasons Healthcare is saddled with debts of £790m and has no other income except money to care for residents to pay them."

The Independent reports Justin Bowden, national officer of the GMB union, has likened the transfer of those homes as "jumping from the frying pan into the fire" and called on the CQC to put the deal on hold until it can establish that Four Seasons "has the financial stability to avoid being 'Son of Southern Cross'."

Southern Cross collapsed under the weight of its debts. A spokesman for Four Seasons, however told the Independent that he was confident the group would be able to refinance its debts by next October.

Update October 14: the CQC says Four Seasons' finances is beyond their "regulatory remit".   

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