French nursing home giant Orpea raises 2 billion euros to fight debt

0

Nursing home giant Orpea plans to ask investors for nearly 2 billion euros as part of its debt restructuring, according to people familiar with the matter.

A capital injection would likely be about two-thirds of the amount and the rest would come from new senior secured debt, said the people, who asked not to be named while discussing private information.

Since entering the market here, Orpea has become the largest private care home operator in Ireland with over 2,100 beds in the Irish market.

Shares of the French company reversed earlier gains after the news and fell 5.7%, while its 2025 bonds were trading nearly 20 cents on the euro.

The struggling French care home operator is seeking to restructure 9.5 billion euros of debt after receiving court approval last week to negotiate with creditors in a ‘reconciliation procedure at the ‘open amicable’ and will present its debt plan on 15 November. The company said it may need to convert 4.3 billion euros of debt to equity and modify other debt instruments as part of a possible restructuring.

Orpea is struggling with its debt load after a scandal over reports of its treatment of care home residents and allegations of financial misconduct. Soaring energy costs are compounding the fallout from a book called ‘The Gravediggers’ which singled out the company’s top executives for putting profits before the welfare of elderly patients, rationing items like the food and diapers.

The company already secured 1.73 billion euros in secured debt from banks in May as part of a financial plan that included the sale of a property. But the deterioration in the property market has jeopardized Orpea’s deadline to dispose of the assets, he said last week.

A company spokesperson declined to comment on the new proposal.

Orpea has appointed Rothschild and Perella Weinberg Partners as financial advisers, as well as White & Case and Bredin Prat as legal advisers, the company announced last month.

Share.

About Author

Comments are closed.