Care homes solution due in 'months'
A solution to the financial woes of stricken care homes provider Southern Cross will be delivered within four months, the company has said.
A deal, hammered out at a crisis meeting between its landlords and lenders on Wednesday, is designed to allay fears that frail and elderly residents may suffer disruption if the company collapses.
It could also help restore confidence in the company, which runs 752 care homes, in a bid to stem the decline in the number of residents.
Southern Cross also said it was working towards a solution to its financial woes, which it hoped to deliver over the next four months. However, it is expected that many of its 80 landlords will withdraw their homes from the group in the coming months to run them independently.
It is not yet clear how many landlords will walk away from the group but it is expected that Southern Cross will ultimately be left a much smaller company.
A company spokesman said on Thursday night: "At a meeting today, Southern Cross, its lenders and the Southern Cross Landlords' Committee reached an agreement to ensure that the continuity and quality of care to all 31,000 residents will be maintained and that every resident will continue to be well looked after."
Darlington-based Southern Cross, the UK's largest care home operator, has been struggling under a £202 million annual rent burden while its own income falls as public sector customers, such as local authorities, make cutbacks.
Southern Cross made losses of £311 million in the six months to March 31. The company, which also runs homes under the Ashbourne Senior Living brand, has warned it is in imminent danger of financial collapse.
It recently announced it would cut its rent payments by an average of 30% over the next four months to buy some breathing space.
The company, which employs 44,000 staff, recently revealed plans to cut 3,000 jobs. These include more than 300 nurses, while 1,275 care staff, 700 catering posts, 440 domestic jobs and 238 maintenance roles could also go as part of its business revamp launched 18 months ago.