Statement From NHP

By Nhp Ltd, PRNE
Sunday, July 17, 2011

LONDON, July 18, 2011 -


 

NHP can confirm that it has retained approximately £14m of
imminently due loan interest payments in order to make provision
for the working capital requirements of the new operating company
that NHP expects to emerge at the end of the current consensual
restructuring process being undertaken by NHP and Southern Cross
taking place as part of the landlord and company led initiative
announced on Wednesday June 15th, 2011.

NHP expects to make a similar retention in respect of its loan
interest payments due in October 2011.

Capita, the Special Servicer representing NHP’s lenders, has
been made aware of the actions taken, and proposed to be taken, by
NHP in this respect and has agreed to suspend its rights to make a
demand for the shortfall in interest payments made by NHP in July
2011
.  It is expected that a similar agreement will be entered
into with Capita in October.

In the view of NHP, any new operating company to emerge from the
current situation has to have the necessary funding at its disposal
in order to ensure investment in the provision of care to the
required standards.

NHP can today confirm that Court Cavendish, the health and
social care specialists currently retained as advisers to NHP, has
provisionally accepted its invitation to join NHP in setting up
this new operating company.

NHP intends therefore at the end of the agreed four month
handover period, to create with Court Cavendish this new operating
company in order to put its 249 homes onto a firm financial footing
and to provide the certainty and continuity of care that all agree
is crucial.

This new company will continue to rely on the existing Southern
Cross staff who manage its 249 homes and the back office services
delivered by Southern Cross’s existing infrastructure to ensure
continuity of care and operations.

NHP is committed to ensuring that moving forward, this new
operating company, which will rent and operate out of the
properties that NHP currently leases to Southern Cross, will be
robust and not subject to the same financial uncertainty that has
challenged Southern Cross over recent months despite the best
efforts of management and staff.

It is envisaged that Court Cavendish will have a stake in the
ownership of the overall business therefore removing one of the
anomalies of the current structure and ensuring a further alignment
of the interests of both the property company and the operating
company.

Paul Thompson, NHP Director, said
today:

“News of this course of action and
the ring fencing of these sums is a very positive development for
all those who currently reside in, or who have family residing in,
homes owned by NHP.

“It is the start of a new era of
stability, planning and good governance.

“We recognise the great concern and
uncertainty caused by recent events, and hence are committed to
doing all that it takes to ensure continuity of care.  Lessons
have to be taken on board from what happened at Southern Cross.

“We are very grateful to Capita, the
Special Servicer who represents NHP’s lenders, for the
understanding manner in which they have responded to our retention
of loan interest payments in order that we can create this new
company with a stable foundation and a brighter future for those it
supports.

“We have kept the Government fully
informed of this latest development, and are looking forward in due
course to the unveiling of a new operating company that will move
forward with high quality care at the heart of everything it does.
  Working closely with the Southern Cross Management Team and
other landlords remains crucial for the good of those who depend on
the care provided out of our homes.

“NHP has chosen one of the most
experienced health and social care operation teams in the UK, Court
Cavendish, to lead with us the new operating company that will, in
time, take over its homes.  Continuity of care in all the
homes owned by NHP remains the number one priority.

“Court Cavendish is a specialist
health and social care turnaround company with decades of
board-level experience and is extremely well placed to assist
us.

“NHP remains totally committed
to:

  • ensuring short and long term continuity of high quality care
    at all NHP homes currently operated by Southern Cross;
  • working with all stakeholders involved in the Southern Cross
    business; and
  • working towards the consensual restructuring of this
    business that is so crucial to so many residents and their
    families.”

Notes to Editors

  • NHP is one of the few property investment groups in the UK
    specialising in the ownership of freehold or long leasehold
    interests in modern purpose-built care homes, the majority of which
    are leased to care home operators on long-term leases.

For further information contact the NHP Press Office on 0800-014-8509

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