Health department to monitor as care home giant goes into administration

Residents and staff at a number of local nursing homes are concerned for their future after owners, Four Seasons, went into administration.

Four Seasons owns around 55 homes across NI with several hundred staff and elderly residents affected in the Co Armagh area.

Sandringham Nursing Home Portadown Photo courtesy of Google

Sandringham Nursing Home Portadown Photo courtesy of Google

Nursing homes in Portadown which could be affected include Lisnisky Care Home, near Craigavon Hospital; Sandringham Care Home on the Gilford Road and Mahon Hall Care Home.

The Laganvale Care Home in Moira, Chestnut Lodge Care Home in Benburb and the Seapatrick Care Home in Banbridge also fall under the Four Season’s umbrella.

Four Seasons is a giant in the care home sector - and news of its potential move into administration has heightened concern for the future of thousands of elderly residents across the UK.

The company is set to appoint corporate undertakers at Alvarez & Marsal (A&M) to carry out the process following an aborted sale attempt.

Sandringham Nursing Home Portadown Photo courtesy of Google

Sandringham Nursing Home Portadown Photo courtesy of Google

Four Seasons houses 22,000 elderly residents across 322 homes, although the firm insists that operations will be unaffected by the move.

The collapse will be the biggest care homes failure since Southern Cross went bust in 2011.

Late last year, US hedge fund H2 Capital Partners, which effectively controls Four Seasons, ordered a sale of the crisis-hit company, which is struggling under a £525 million debt mountain. The bulk of the debt is held by H2, which is run by Spencer Haber.

Only weeks ago, Four Seasons insisted that it had “sufficient operating liquidity” to be able to complete the sale process.

Mahon Hall Care Home Portadown Photo courtesy of Google

Mahon Hall Care Home Portadown Photo courtesy of Google

A&M will now attempt to sell the group out of administration.

The failure of Four Seasons will cap a sorry saga for the group, which is still nominally owned by Guy Hands’ private equity vehicle Terra Firma.

Terra Firma bought Four Seasons for £825 million in 2012 and has been forced to stomach a £450 million writedown on its investment.

There have been acute worries over Four Seasons’ financial performance and debt pile for several years.

Lisnisky Care Home Portadown Photo courtesy of Google

Lisnisky Care Home Portadown Photo courtesy of Google

It has been stung by a cut in local authority fees, rising costs and the introduction of the national living wage, and the group has continuously warned over its long-term stability.

A spokesperson for Four Season said: “Further to the announcement on 10th December 2018, Four Seasons Health Care Group (the “Group”) is launching on 3 May 2019 an independent sales process, as the next stage of its restructuring, which it expects to complete by year end.

“Richard Fleming, Mark Firmin and Richard Beard of Alvarez & Marsal Europe LLP, have been appointed as Joint Administrators to the holding companies that carry debt, Elli Investments Limited and Elli Finance (UK) Plc (together “the Companies”). The Companies do not own or operate any care homes or hospitals directly.

“The operating companies under which the care home and hospital operations sit are not in administration and continue to be run as normal by the existing leadership teams. The Group has entered into a funding agreement which provides sufficient operational funding to ensure continuity of care for all of the Group’s residents and patients during the independent sales process period.

“The aim of the independent sales process is to achieve the highest or best offer for the Group for the benefit of all stakeholders, to ensure continuity of care and to maximise value for creditors.”

Dr Claire Royston, Group Medical Director of Four Seasons Health Care, said: “Today’s news (Tuesday) does not change the way we operate or how our homes are run or prompt any change for residents, families, employees and indeed suppliers. Our priority remains to deliver consistently good care. It marks the latest stage in the Group’s restructuring process and allows us to move ahead with an orderly, independent sales process.”

Richard Fleming, joint administrator of Elli Investments Limited and Elli Finance (UK) Plc (holding companies only) added: “We are committed to ensuring the Group delivers continuity of care as we work to undertake the independent sales process. The Group has continued to improve its quality ratings across their portfolio of homes and hospitals. The Group’s operations are fundamentally strong and a successful sales process will enhance those operations’ ability to thrive.”

Unite the Union said 3,500 workers and 1700 vulnerable eldlery people are affected in NI.

“Questions must be asked about role of private sector in the provision of social care and how the NHS here became so dependent on one company in particular,” said a union spokesperson.

Unite Regional Officer, Kevin McAdam, with special responsibility for his union’s membership in the health and social care sectors, demanded urgent intervention by the Department of Health to take over the operation of fifty-five nursing homes across NI in light of news that owners, Four Seasons, had collapsed into administration.

“The news that Four Seasons has entered administration casts huge uncertainties over the future of fifty-five nursing homes that this company operates in NI. Approximately three and a half thousand staff work in these homes who will be left fearful for their job security. More than seventeen hundred vulnerable and older clients, and their families, will also be left under a cloud of uncertainty about the future of their care provision.

“The collapse of Four Seasons is only the latest instance of private sector failure in our public services; most particularly in the provision and quality of social care. While many will be left rightfully questioning why Northern Ireland’s social care system has been allowed to become so dependent on one provider, the more important question is really why anyone thought that the private sector had any positive role to play in the provision of social care in the first place.

“Despite the mammoth difficulties involved, the Department of Health has been left with the responsibility for these care homes, the staff and the clients. The Department must intervene and nationalise these nursing homes so as to operate them as an integral part of our health and social care service”, Mr McAdam concluded.