LONDON, July 18, 2011 /PRNewswire/ --
NHP can confirm that it has retained approximately £14m of imminently due loan interest payments in order to make provision for the working capital requirements of the new operating company that NHP expects to emerge at the end of the current consensual restructuring process being undertaken by NHP and Southern Cross taking place as part of the landlord and company led initiative announced on Wednesday June 15th, 2011.
NHP expects to make a similar retention in respect of its loan interest payments due in October 2011.
Capita, the Special Servicer representing NHP's lenders, has been made aware of the actions taken, and proposed to be taken, by NHP in this respect and has agreed to suspend its rights to make a demand for the shortfall in interest payments made by NHP in July 2011. It is expected that a similar agreement will be entered into with Capita in October.
In the view of NHP, any new operating company to emerge from the current situation has to have the necessary funding at its disposal in order to ensure investment in the provision of care to the required standards.
NHP can today confirm that Court Cavendish, the health and social care specialists currently retained as advisers to NHP, has provisionally accepted its invitation to join NHP in setting up this new operating company.
NHP intends therefore at the end of the agreed four month handover period, to create with Court Cavendish this new operating company in order to put its 249 homes onto a firm financial footing and to provide the certainty and continuity of care that all agree is crucial.
This new company will continue to rely on the existing Southern Cross staff who manage its 249 homes and the back office services delivered by Southern Cross's existing infrastructure to ensure continuity of care and operations.
NHP is committed to ensuring that moving forward, this new operating company, which will rent and operate out of the properties that NHP currently leases to Southern Cross, will be robust and not subject to the same financial uncertainty that has challenged Southern Cross over recent months despite the best efforts of management and staff.
It is envisaged that Court Cavendish will have a stake in the ownership of the overall business therefore removing one of the anomalies of the current structure and ensuring a further alignment of the interests of both the property company and the operating company.
Paul Thompson, NHP Director, said today:
"News of this course of action and the ring fencing of these sums is a very positive development for all those who currently reside in, or who have family residing in, homes owned by NHP.
"It is the start of a new era of stability, planning and good governance.
"We recognise the great concern and uncertainty caused by recent events, and hence are committed to doing all that it takes to ensure continuity of care. Lessons have to be taken on board from what happened at Southern Cross.
"We are very grateful to Capita, the Special Servicer who represents NHP's lenders, for the understanding manner in which they have responded to our retention of loan interest payments in order that we can create this new company with a stable foundation and a brighter future for those it supports.
"We have kept the Government fully informed of this latest development, and are looking forward in due course to the unveiling of a new operating company that will move forward with high quality care at the heart of everything it does. Working closely with the Southern Cross Management Team and other landlords remains crucial for the good of those who depend on the care provided out of our homes.
"NHP has chosen one of the most experienced health and social care operation teams in the UK, Court Cavendish, to lead with us the new operating company that will, in time, take over its homes. Continuity of care in all the homes owned by NHP remains the number one priority.
"Court Cavendish is a specialist health and social care turnaround company with decades of board-level experience and is extremely well placed to assist us.
"NHP remains totally committed to:
- ensuring short and long term continuity of high quality care at all NHP homes currently operated by Southern Cross;
- working with all stakeholders involved in the Southern Cross business; and
- working towards the consensual restructuring of this business that is so crucial to so many residents and their families."
Notes to Editors
- NHP is one of the few property investment groups in the UK specialising in the ownership of freehold or long leasehold interests in modern purpose-built care homes, the majority of which are leased to care home operators on long-term leases.
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