H/2 agrees new funding for Four Seasons
Financially beleaguered care home operator Four Seasons Health Care has won a commitment from H/2 Capital Partners on behalf of its affiliated investment funds, whereby H/2 will provide up to £70m of funding to help Four Seasons to stabilise operations and ensure continuity of care for residents.
Four Seasons chairman Robbie Barr said the company was very appreciative of H/2’s willingness to consider expanding its already substantial commitment and for the continued support of all parties in pursuit of a consensual agreement.
“Working together to close the facility over the next two to three weeks, we believe that this incremental liquidity and initial steps toward a revised governance structure lay the foundation for a consensual restructuring that benefits all stakeholders, and in particular provide continuity of care for our residents,” said Mr Barr.
The agreement will see H/2 increasing its loan from £40m to £70m, whilst simultaneously reducing the interest rate – to LIBOR+3.75%, which compares to an interest rate of LIBOR+6.00% on the existing £40m loan. In addition, the H/2 facility carries no upfront fees or prepayment penalties. H/2 has also indicated that it is open to considering interest from Four Seasons’ other existing creditors to participate in the facility.
The agreement is expected to close prior to 7 March, subject to Four Seasons’ satisfaction of certain closing conditions, including initial governance milestones critical to a consensual restructuring. Four seasons and H/2 have also agreed an amendment to their existing standstill and deferral agreement, which now includes a revised set of restructuring milestones agreed by the company and H/2. The revised restructuring milestones set forth in the amendment include the closing of the facility on or before 7 March, and a mutual agreement as to restructuring terms on or before 16 April. The amendment further extends the forbearance period’s long-stop date to 1 June.
Four Seasons and H/2 Capital Partners says they are each committed to regularly informing the multiple stakeholders important to the business as to the status of the restructuring. Both Four Seasons and H/2 say they recognise the importance of continuity of care for residents and stability for employees and other stakeholders.