At-risk British care home agrees deal with creditors

16th June 2011, Comments 0 comments

Southern Cross, the troubled owner of 750 care homes in Britain, said Wednesday it had reached an agreement with creditors and landlords to ensure that "care to all 31,000 residents will be maintained".

The firm, which recently revealed plans to cut 3,000 jobs, also said it was formulating a "consensual solution to the company's current financial problems" to be delivered over the next four months.

"At a meeting today, Southern Cross, its lenders and the Southern Cross Landlords' Committee reached an agreement to ensure that the continuity and quality of care to all 31,000 residents will be maintained," a company spokesman said.

The troubled carer is grappling with a £230 million (262 million euros, $378 million) annual rent bill and recently warned it was in a "critical financial condition" as it unveiled a £311 million loss in the six months to March 31.

It recently announced it would slash rent payments by 30 percent over the next four months, while major creditors Barclays and Lloyds are believed to be owed £50 million.

"The company and the landlords will work towards a consensual solution to the company's current financial problems which will be delivered over the next four months," added the spokesman in a statement.

"The business, including the delivery of care, will continue to be the responsibility of the Southern Cross Board, management team and staff who have the full support of both the landlords and lenders in the delivery of this important task," the spokesman confirmed.

The company, based in the northeast of England, employs 44,00 staff and is set to axe more than 300 nurses and 1,275 care staff as part of its restructuring programme.

© 2011 AFP

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