STRUGGLING care home provider Southern Cross will consider putting the business up for sale once its battle to cut costs with landlords is over, City A.M. can confirm.
Southern Cross last week appointed Greenhill as joint adviser to run discussions with landlords alongside KPMG and turnaround specialist Bolt Partners, but the investment bank is also tasked with scrutinising the firm’s longer-term options, including a sell-off or £100m cash injection.
The firm’s immediate priority is to cut a deal with landlords to solve its cash flow problems, which is likely to include deferring or cuttings its rental payments.
Southern Cross’s biggest landlords – NHP, London & Regional and Lloyds Properties – have “made supportive noises” but have not yet signed a long-term deal, according to a source familiar with the discussions.
The company currently pays £250m rent a year, after it sold off its care homes in 2008 to rent them back under increasingly expensive leasing deals.