LONDON Four Seasons Health Care said its lenders, owed around 1.4 billion pounds, have until July 6 to agree to a debt-for-equity deal, otherwise the British care-home operator company will be put up for sale.
The debt-for-equity swap, put to lenders by debt administrator Hatfield Philips earlier this week, would see senior lenders take about half the company's shares in exchange for a big cut in its debt, two sources with knowledge of the situation said.
"The offer looks pretty fair given the circumstances and there is a real chance this proposal will lead to a breakthrough," one of the sources said. An agreement would bring to a close year-long talks between the company and its lenders.
Four Seasons said the restructuring deal addressed the different interests of the lenders, but said if lenders were unable to reach agreement then it and Hatfield Philips would commence "an orderly sale" of the group.
Given the depressed state of the property market, any sale would see Four Seasons sold for substantially less than it owes.
The company's property portfolio was valued at 900 million pounds by Knight Frank LLP late last year but real-estate values have fallen further since then. <ID:LF941547>
(Reporting by Tom Freke; Editing by Dan Lalor)
($1 = 0.6113 pound)