Business

Southern Cross 'to hive off 132 homes'

Southern Cross sign
Image caption Southern Cross landlords are holding an emergency meeting

Southern Cross, the troubled care home provider, is planning to return 132 of its homes to landlords.

The company wants to return 47 homes by the end of September, with the remaining 85 returned by 2016.

Southern Cross currently runs 752 care homes but has been struggling with high rents of about £200m a year.

But the company denied a report that some homes faced closure, saying that no decision had been taken to close any of its homes.

"We recognise that the current situation and continued media speculation will have caused concern to residents in Southern Cross care homes, and their relatives, and we apologise for this," said chairman Christopher Fisher.

"Our primary concern in this matter remains the welfare of the residents living in our homes. The financial restructuring will not affect the provision of quality care in any of our homes."

'Incredibly distressing'

It is expected that many of the properties will continue to be run as care homes, although some landlords may wish to use the properties for other purposes.

Closing a home typically takes between four and six months, which should provide enough time to find suitable alternative accommodation for residents.

Unison, the public sector union, said it was an "incredibly distressing time" for Southern Cross' 31,000 residents, their families and for workers in the company's homes.

"Another day, another report of shocking lack of care from Southern Cross. How do this company's bosses, past and present, sleep at night?" said Dave Prentis, Unison's general secretary.

"The government must step in to regulate the privatised care market. There are many other Southern Cross-style companies out there and this cannot be allowed to happen again."

An earlier document, circulated at a meeting on Monday by two of the care home operator's landlords Four Seasons and Bondcare, had set out a plan to put Southern Cross into administration but that has now been dismissed.

"The discussion document considered by the meeting of smaller landlords sought to establish those who would be prepared to issue winding-up petitions 'if required'. The situation has moved on and that document is no longer under consideration," Four Seasons said in a statement.

On Wednesday, the Darlington-based company announced plans to cut 3,000 jobs from its workforce of 44,000 staff.

It is struggling with high rents and has already deferred 30% of its rent to its 80 landlords for four months.

The group plans to reduce its annual rent bill from £202.3m to £137.5m, according to the Financial Times.

Southern Cross' landlords are currently holding their third emergency meeting in a week, as they attempt to come up with an alternative proposal that they can put to the company.

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