Landlords are set to reject Southern Cross’s ultimatum of accepting a 30% rent cut, Community Care understands.
Most will take the attitude of Bondcare in refusing to accept Southern Cross’s four-month 30% reduction in rent so it can arrange a restructuring deal, it is believed.
“They are all going to do that,” said an industry insider.
Instead, experts say rival care home operators are actively planning on taking over the running of the homes. Bondcare, which is one of Southern Cross’s five largest landlords and a care home operator itself, has said it wants to run its properties itself. It is understood that rival operator Four Seasons, which owns 45 Southern Cross homes, is mooting a similar move.
A spokesman for Bondcare, which owns 39 Southern Cross homes, said: “Our only concern is for the care of the residents. If Southern Cross goes into administration, the care of these residents in our view would be jeopardized. Our suggested solution is to take back the operation of our homes and we have offered the same solution to other landlords to deal with this crisis.
“To date we have not got past first base with Southern Cross in relation to this proposed solution despite being in negotiations with them since December 2010. In our view the rent reduction does not solve the underlying problem.”
It is understood that Bondcare has spoken with other landlords, who between them own 200 Southern Cross homes, about Bondcare running these homes.
Southern Cross has said that its rent bills have become unsustainable, given falls in revenue from councils, prompting fears that it will go into administration. These fears were heightened this week after Southern Cross said it would unilaterally cut rents payable to landlords by 30% from June to September.
A spokesman for Southern Cross said it had not received any indications from landlords, except for the public statement from Bondcare.
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