29th Aug 2008 14:08
Southern Cross Healthcare Group PLC
£31m Sale and Long-term Leaseback of Freehold Properties
29 August 2008 - Southern Cross Healthcare Group PLC (LSE: SCHE) ("Southern Cross", the "Company" or the "Group"), the largest provider of UK care home services, today announces the sale and long-term leaseback of the freehold interests in nine care homes (including two day care centres) to a subsidiary of Daejan Holdings plc for a total cash consideration of £31.1 million. Six of the nine freeholds being sold were acquired as part of the Portland acquisition announced earlier this year. The proceeds from the divestment will be used to partially pay down two syndicated credit facilities and a bilateral credit facility put in place earlier this year to fund additional acquisitions and developments. The syndicated acquisition facilities currently have £81.1 million of drawings outstanding (£35.1 million in a facility known as B1 and £46.0 million in a facility known as B2) and the bilateral development facility currently has £11.5 million of drawings outstanding.
The gross asset value of the freehold interests being divested is £37.2 million and a book loss of £6.1 million will be incurred by Southern Cross on completion of the sale. The annual rent payable by Southern Cross in respect of these homes is £2.5 million. £9.1 million of the proceeds from sale will be used to pay down the B1 facility, £17.9 million will be used to pay down the B2 facility and £3.3 million will be used to pay down the development facility.
Bill Colvin, Chief Executive of Southern Cross, commented: "We are pleased to announce the sale of this first package of freehold properties today. Discussions are ongoing with other potential purchasers regarding a further 20 further freeholds to be divested and the proceeds from any sale will also be used to further reduce borrowings. Southern Cross is continuing to discuss with its banking syndicate the provision of longer term funding arrangements for the Group."
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For further information, please contact:
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Southern Cross Healthcare Group PLC |
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Bill Colvin, CEO |
Tel: +44 (0)1325 351100 |
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Richard Midmer, FD |
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Financial Dynamics |
Tel: +44 (0)20 7831 3113 |
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David Yates |
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Emma Thompson |
About Southern Cross
Southern Cross is, in terms of number of beds, the largest UK provider of care home services for the elderly and a major provider of specialist services for people with physical and/or learning disabilities. The Company's care homes for the elderly operate under two distinct brands: Southern Cross Healthcare and Ashbourne Senior Living. Both brands provide a range of social and personal care services and nursing care services for elderly people with physical frailties and differing forms of dementia. The Company's specialist services operate under the Active Care Partnerships brand and provide long-term care services for people with physical and/or learning disabilities and for younger people with complex forms of challenging behaviour.
Southern Cross is focused on providing high quality care in well invested facilities, seeking to be the home of choice in each local community in which it operates. The Company provides care services for most of the local authorities in the UK which, together with the NHS, represent over circa 70% of the Company's revenues. Its care home portfolio is largely purpose-built with a high percentage of single occupancy rooms and rooms with ensuite bathrooms.
This announcement includes statements that are, or may deemed to be, "forward looking statements". These forward looking statements can be identified by the use of forward looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or " should" or, in each case, their negative or other variations or comparable terminology. These forward looking statements include matters that are not historical facts and include statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies and the outlook on the care home industry. By their nature, forward looking statements involve risk and uncertainty because they relate to future events and circumstances.
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