Four Seasons failed to pay off a portion of debt owed to H/2 Capital Partners
A “for sale” sign has been hoisted over Four Seasons as fears grow for the future of Britain’s biggest care homes operator.
The US hedge fund H/2 Capital Partners, which is in effective control of the group, has put Four Seasons up for sale and swept aside the company’s senior management, installing Margaret Ford and Mark Ordan to the board of directors.
It comes after the care homes giant, which is still nominally owned by Guy Hands’ private equity vehicle Terra Firma, failed to pay off a portion of debt owed to H/2.
As its principal creditor, the American hedge fund, run by Spencer Haber, holds sway over the firm’s assets and controls the group.
“These changes have been made in furtherance of an independent sales process and facilitate such a process taking place,” Four Seasons said on Monday, adding that a “transparent arm’s length sales process for the sale of all or substantially all of the assets of the group” is under way.
The move throws into doubt Four Seasons’ long-term future amid worries over its financial performance.
It has been stung by a cut in local authority fees, rising costs and the introduction of the “national living wage”, and the group has continuously warned over its long-term stability.
On top of this, Four Seasons is struggling under a £500m-plus mountain of debt, which is controlled by H/2 and other bondholders, who are also thought to have sanctioned the sale.
H/2, which has been attempting to restructure the business, has previously said it stands ready to take control of the care homes group with Lady Ford, the former chairman of rival Barchester, lined up to chair the company.
Sources inside Four Seasons insisted that there would be no impact on the day-to-day running of homes as a result of the sale process.
As part of the shake-up, Ben Taberner, Claire Royston and Tim Hammond – Four Seasons’ finance chief, medical director and chief executive respectively – have been removed from the board but remain in place to carry out day-to-day duties.
Four Seasons houses 17,000 elderly residents across 343 homes.
Terra Firma bought the business for £825m in 2012 and has been forced to stomach a £450m write-down on its investment.
H/2 declined to comment.