Southern Cross fights for rent cut
SOUTHERN Cross will sit down with landlords this week in a bid to settle its financial position and stave off administration.
The care homes provider, which has a market cap of just £9m after months of financial trouble, is expected to try and thrash out a deal to make its sale-and-lease-back burden manageable.
Its landlords, including NHP, London & Regional and Four Seasons, are understood to have asked to meet with HMRC to request allowances on their taxes, and have called on Southern Cross to share more of the pain of its move to cut its rent bill by 30 per cent over the summer. HMRC declined to comment.
Southern Cross, which is set for relegation from the FTSE Small Cap to the Fledgling index next week, is hopeful of getting a long-term agreement sealed this week.
One person familiar with Southern Cross’ talks said the involvement of HMRC has been met with frustration by the firm’s management, who see it as a way for the landlords to negotiate in public.
Southern Cross’ problems were compounded yesterday when it emerged that 28 per cent of its 581 English care homes had been criticised by the Care Quality Commission watchdog.