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Wednesday, 1 June 2011

Southern Cross in Trouble

Southern Cross, the nursing home provider, has asked landlords to defer a portion of its rent payments for 4 months.  This is worrying news for all those involved, most particlularly residents and relatives of those in care.  Darlington-based Southern Cross recently reported half-year losses of £311m.  The company, which operates 750 homes, warned then that it was in "critical financial condition".

The landlords are expected to be supportive, according to the company, but their patience may run out.  However, it would be very difficult for the government and local authorities to resist calls to support the firm and ensure that there is minimal disruption for residents and their families.  This might be a politically prudent "bail out"  It may depend on who their bankers are......

If you are provider to Southern Cross then you need to stress test your business to see if it could withstand any debts from Southern Cross not being paid or deferred.  If you think it might cause a problem then have a plan B.  We are happy to talk through options on the phone for no charge.

Blogged by Robert Moore

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Many thanks for your comments. If you have a private business problem and you want advice give us a call on 0800 9700 539 or email me at keiths@companyrescue.co.uk. If you are a professional advisor with a troubled client, please suggest they visit www.companyrescue.co.uk or contact me as above.

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