13th February 2012
US venture capital fund KKR has been buying up debt owed by Wilmslow-based care homes operator Four Seasons, according to a report.
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The Sunday Times said that the firm, which also owns Pets at Home, the North West retailer, has bought up a large slice of Wilmslow-based Four Seasons' loans ahead of a crucial refinancing in September, raising suspicions that it may use its position as a major debt holder as a bargaining chip to gain control of the company.
Four Seasons Health Care underwent a major restructuring two years ago in a debt-for-equity refinancing which saw RBS take a 40% stake in the company and its debt pile reduce from £1.6bn to £750m.
Since then, the collapse of Southern Cross and Four Seasons' inheritance of part of its portfolio has made it the biggest care homes operator in the country, with 500 homes and more than 25,000 employees. It also generates ebitda of around £100m a year.
However, the £750m it owes is due for renewal once more in September and although the company is expected to be able to raise a significant chunk of new loans, it is expected that there will be a shortfall which means it will need to find new equity investment.
The Sunday Times suggested that that existing shareholders including RBS and Qatar Investment Authority could be persuaded to put in new cash, or KKR could attempt an alternative restructuring which would place it in overall charge of the company's affairs.