Southern Cross calls meeting for investors

Troubled care homes operator Southern Cross has called a meeting for its investors following the news that it has slashed rental payments to its landlords.


Troubled care homes operator Southern Cross has called a meeting for its investors following the news that it has slashed rental payments to its landlords.

Troubled care homes operator Southern Cross has called a meeting for its investors following the news that it has slashed rental payments to its landlords.

The healthcare group sent notice of a general meeting to its shareholders today, which will take place on 12 July 2011.

At the meeting, the directors will provide shareholders with an update on the financial position of Southern Cross and its subsidiary undertakings, said a statement.

This follows the announcement that the group was cutting rental payments to its landlords by 30 per cent while it agrees a restructuring of the company.

Christopher Fisher, chairman of Southern Cross, said, ‘The objective will be to emerge with a stable and sustainable business model for the continuing care of our residents.’

The group currently operates 752 care homes, with 31,000 residents.

Private equity firm Blackstone issued a statement in response to what it believes were ‘inaccurate and misleading’ news stories about its former portfolio company Southern Cross.

The firm said recent media coverage suggested that Blackstone ‘created problems for Southern Cross by buying large businesses that owned its real estate, imposing unsustainably high rents and selling the real estate at huge gains to Blackstone; thereby leaving a company incapable of operating successfully and unable to invest the required capital and management resources in the business’.

Blackstone denies any wrongdoing, and claims that consolidation of the care home industry was ‘a sound thing to do’.

The group states that its investment in Southern Cross made a ‘positive return’ for investors and that after the IPO in July 2006, the company’s share price nearly tripled.

Todd Cardy

Todd Cardy

Todd was Editor of GrowthBusiness.co.uk between 2010 and 2011 as well as being responsible for publishing our digital and printed magazines focusing on private equity and venture capital. Connect with...

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