Four Seasons Health Care (FSHC) today confirmed it will be unable to pay interest on its debt in December as talks on restructuring proposals with its creditors continue.
FSHC made the announcement during an update on its Q3 financial results which showed a 5.4% rise in turnover year on year to £8.3m and EBITDA broadly in line with the prior year at £13.9m.
Chairman Robbie Barr said: “In October the Group announced that it was unlikely to pay the December interest on the notes, in order to maintain liquidity.
“At the end of September, the Group had a cash balance of £25m and, excluding the December interest payments, the Board is confident that the business has sufficient liquidity to maintain operations while a restructuring takes place.”
Robbie said restructuring proposals submitted by Terra Firma and leading creditor H/2 Capital assumed the allowance of a deferral in interest debt payments up until March.
Commenting on the H/2 Capital proposals, he added: “We very much welcome aspects of the proposal by H/2 and their willingness to engage in restructuring discussions and look to agree a deferral and forbearance agreement.
“Agreement is yet to be reached between the principal parties, but we are encouraged that they continue to express a desire to find a consensual solution.”
The FSHC chairman was unable to give a date for the expected conclusion of the talks with H/2 Capital when asked by Care Home Professional.
The H/2 Capital proposals include significant new equity for the business as well as a lower level of leverage (see BREAKING NEWS: Four Seasons creditor issues debt restructuring counter proposals).