The continuing saga of troubled care home provider Southern Cross Health took another turn yesterday, with the company’s landlords once again asked to come to their rescue.
Landlords of the floundering company will be closely examining their landlord insurance policies today, now the Southern Cross board have informed them of what they would really like them to do. The request will not have been too popular with the group’s landlords as it included a request for them to lower their rents by 30% from the month of June, until the company can develop a strategy to move away from their current situation.
Not surprisingly no agreement was reached at the meeting but landlords present did agree to further talks about the situation and proposed to form an official committee to conduct negotiations. Summing up the meeting, new Chief Executive of Southern Cross, James Buchan, said “I thank the landlords for attending today’s meetings and for the time and commitment that they are giving to the process. These developments are a further step in a consensual and constructive process to create a sustainable future for the business. Throughout, Southern Cross remains fully committed to the provision of quality care to all of its residents.”
Being the largest provider of private home care in the UK, Southern Cross does indeed have many residents to care for. It is estimated the company care for well over 30,000 people in 750 locations stretched across the UK. The present troubles started in March of this year when the company said it was struggling to pay its yearly £250 million rent bill; unfortunately the announcement resulted in two thirds of the company share price disappearing in one day. A complete re-structuring of the board has taken place since with the company struggling to keep its head above the water. Key players such as investment bankers Greenhill and accountants KPMG have now been brought in to try and save the situation.