By Mark Kleinman, City editor
Four Seasons Health Care (FSHC), one of Britain's biggest private care home operators, is on the brink of administration after months of failed efforts to reduce its mammoth debt-pile.
Sky News has learnt that two of FSHC's holding companies will seek court approval to appoint administrators later on Tuesday, placing the long-term ownership of the business in doubt.
The company is a key player in the UK's social care sector, serving about 17,000 residents and patients, and employing roughly 20,000 staff.
Alvarez & Marsal (A&M), the professional services firm, has been lined up to handle the administration, which would be the biggest in the care homes sector since Southern Cross collapsed in 2011.
People close to the situation insisted that the move to appoint administrators would not prompt any change to care arrangements or the closure of homes.
One insider said the objective of the administration was to secure a sale of the entire group over the coming months.
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"The point of this is to ensure a fully funded independent sale process to allow the group to emerge with a viable future where it is not saddled by the company's historic debt obligations," the insider said.
Sources said the operation of Four Seasons' 253 residential and nursing care homes would be unaffected by the move to place its parent companies into administration, with a sale process – which had been expected since the turn of the year – commencing immediately.
Although the company's patients and residents have no imminent cause for concern, the company's collapse into administration will raise fresh questions about Britain's social care funding and the ability of private sector healthcare providers to sustain substantial debt structures.
Labour is likely to use the situation to criticise government health policies, with Matt Hancock, the health and social care Secretary, expected to face pressure to commit to supporting the business if required.
Four Seasons has been owned by Terra Firma Capital Partners, the private equity vehicle headed by financier Guy Hands, since 2012.
Terra Firma paid £825m for the business but FSHC's £500m-plus debt pile has been the subject of protracted restructuring negotiations.
Mr Hands's fund is no longer in operational control of Four Seasons, with a large chunk of its debt now held by H/2 Capital Partners, a US-based hedge fund.
H/2 is seen as the likeliest owner of the business after having pumped hundreds of millions of pounds into its bonds, although it was unclear whether it still plRead More – Source