Four Seasons to opt for debt-for-equity swap

Troubled care home operator Four Seasons Health Care announced yesterday that it has agreed with its creditors for a debt restructuring via a debt-for-equity swap. The restructuring will cut the company’s £1.5 billion ($2.4 billion) of debt to £780 million.

Royal Bank of Scotland, the holder of some of Four Seasons’ senior and junior debt, will become the largest shareholder, with a 40% equity stake. Although the agreement is subject to legal documentation, the company’s special servicer, Hatfield Philips noted that it expected the process to be completed by 16 November.

The company, which owes a total of £1.5 billion in debt, has a complex capital structure of 11 tranches held by several firms, such as RBS, Marathon Asset Management, and Cheyne Capital.