Four Seasons Given Respite

Four Seasons Healthcare has been given until the end of October to negotiate with its lenders after it defaulted on a Gbp1.5bn debt repayment earlier this week.

During the two months grace, the creditors of care home operator Four Seasons will not be able to push it into administration reports the Financial Times.

The company will spend the breathing space talking to lenders including senior lenders Royal Bank of Scotland, Cheyne Capital, Marathon Asset Management and a Morgan Stanley real estate fund to try and restructure its debt.

“Negotiations continue with our lenders and the executive directors of Four Seasons are confident it will result in the business being refinanced or restructured in a way that will have no impact on the Group’s underlying day-to-day trading operations,” said a statement released by the company.

The company’s earnings are believed to be higher this year than last year but the existence of 11 tranches of debt including PIK notes meant that it was too indebted and it first breached covenants on its debt at the end of June.

Qatari investment vehicle Three Delta purchased Four Seasons in a Gbp1.4bn buyout from Allianz Capital Partners in late 2006. It is understood that the company has around Gbp 1.2bn of debt.

Source: Thomson Merger News