The final details of Southern Cross’s restructure confirm that a number of landlords will be left out of pocket.
The beleaguered care homes operator today said that its restructure, including the sale of the freehold properties that it owns, “are likely to be materially less than the indebtedness owed to the group’s landlords and the lenders”.
It added: “There will remain a material shortfall owing to the landlords, the lenders and HM Revenue & Customs.”
The 11 Southern Cross leasehold properties will be sold to new operators for just over £1m, of which most will be repaid to Barclays Bank.
A total of 19 freehold buildings will also be sold to third parties. All of the disposals are expected to be complete by early November.
75% of the Southern Cross portfolio of 752 homes will transfer to landlords at either the end of September, or the end of October.
However, as part of the restructure, lenders and landlords will continue to provide extra working capital support to the company, providing a full deferral of the rent due to them during September.
Southern Cross also revealed that its chairman Christopher Fishing was stepping down from the board with effect from 30 September.
He said: “The demise of Southern Cross is a matter of considerable regret. It has involved the loss of all shareholder value as well as a loss of value for our principal creditors.”
joanna.bourke@estatesgazette.com
