Council will act if at risk care homes go bust

Victoria Care Home, Victoria Street, Rainford, St Helens
Victoria Care Home, Victoria Street, Rainford, St Helens
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Town hall chiefs say they will “act quickly” to protect residents in the event of a borough care home going out of business.

They spoke out after it was revealed Britain’s biggest care home provider, Four Seasons, was at risk of going bust.

A council spokesman said: “We work closely with our providers, for the care and provision of our residents is paramount.

“We are aware of this news and will continue to monitor the situation.”

Four Seasons runs Victoria Care Home in Rainhill and Alexandra Care Home in Newton-le-Willows.

Last week, Four Seasons reported a 39 per cent fall in annual earnings to £38.7m, and the debt-laden company’s private equity owner admitted that it did not have enough money to meet its long-term needs.

Tim Snow, senior analyst at Moody’s, has now branded the company’s financial structure “unsustainable”.

The group, which houses 20,000 elderly residents across 450 homes, has been stung by a cut in local authority fees and rising costs, and faces a further hit with the introduction of the national

living wage.

It is also saddled with £525 million of debt and faces interest payments of more than £50 million a year.

Mr Snow said the company “will not be able to service material levels of cash to pay debt going forward” and he now views a debt for equity swap with lenders as “the most likely outcome”. The company’s lenders include US investment giants HCP.