Four Seasons plans restructure to slash its mountain of debt

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FOUR SEASONS, the stricken care homes operator owned by private-equity guru Guy Hands, has promised to fix its debt-laden balance sheet by the end of the year to help fuel a turnaround.  

The battered group has to pay £55 million a year in interest payments following Hands’ debt-fuelled acquisition of the company in 2012. 

His firm Terra Firma paid £825 million but used £525 million of loans, leaving Four Seasons with scores of heavyweight lenders who want paying back. 

“We don’t think the capital structure is right for the long-term needs of the business,” chairman Robbie Barr said. 

“We have started to engage with bondholders, landlords and key stakeholders with a view to restructuring the balance sheet and the economics of the business,” he added. “All options are open and I am not going to speculate what the solution might look like but we’re going to come up with a new capital structure by the end of the year.”

It’s another headache for Hands, who dropped a £1.5 billion lawsuit against Wall Street bank Citi in June after an embarrassing court performance, where his memory of events related to the 2007 takeover of EMI failed to meet the burden of proof in court. 

Four Seasons started to rally last quarter, with the number of residents reaching a two-year high. Underlying earnings were at their highest since 2014 at £13.6 million.

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August 23, 2016 |
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