ADASS Amiss On Four Seasons

2 Mar 2012

GMB, the union for staff in care homes, has completed a thorough analysis of the differences between the reports released in August 2011 and February 2012 by the Association of Directors of Adult Social Services(ADASS) on the financial prospects for Four Seasons Healthcare. See notes to editors below for the details of the main differences between the two reports.
Justin Bowden, GMB National Officer for the care sector, said ” We are entitled to ask why has ADASS made this u turn in their assessment of Four Seasons which amounts to a ‘crisis, what crisis?’ conclusion. This makes ADASS and the government the only two parties unable to recognise a problem when they see it.  Both previously ignored repeated warnings from GMB that Southern Cross, burdened as it was with sky high rents, was not sustainable.
The £780m debt mountain Four Seasons is saddled with hasn’t gone away. Four Seasons has been secretly up for sale for months. Four Seasons are relying on shareholders or new investors to plug their £230m refinancing gap. This explains why independent ratings agency Company Watch gave Four Seasons a 14 point out of 100 points rating, meaning it is classed as “very vulnerable”
The previous ADASS report from August noted that Four Seasons has already ‘twice gone to the brink in debt negotiations where a “fire sale” of the business was being actively considered’, so we can only speculate as to why ADASS have flip-flopped in their assessment when the financial sector is describing Four Seasons as ‘ very vulnerable’. 
Just last month, as the new ADASS report was being published, Mr Calveley, Four Seasons’ Chief Executive, said “The reduced net debt of £780m, which falls due in September, is still too much to refinance in the current weak debt market”. This was quoted with the headline “Four Seasons races to refinance £780m in debt”. (Financial Times, February 8, 2012).
The 25,000 elderly and vulnerable people in the 500 care homes, their families, local councils and the 30,000 staff deserve to know how the finances of this company add up and this report does nothing to help them”.