Craegmoor Refinancing Paves Way For ‘Exit’

Craegmoor Healthcare, one of the UK’s biggest care home operators, has completed a £255m refinancing that opens the door for a potential sale of the business.

The deal sees a bank facility arranged by the Bank of Scotland replace a structure that securitised Craegmoor’s whole business. Besides cutting the group’s interest payments, the deal will give it the flexibility to buy and sell sites.

“This deal means we can exit when we want to,” said chairman Gavin Simonds. “There are no banks currently chasing about with our books, although I don’t always promise to answer that question. That will be a conversation maybe in 2008.”

Craegmoor turned over £170m last year and employs more than 6,700 staff who work across 234 homes. The business caters for older people, as well as patients suffering from serious conditions such as Asperger’s syndrome, and its biggest customers are local authorities and primary care trusts.

Over the past three years the group has sold 61 of its under-performing homes, a restructuring that it claims has enhanced its profitability.

Chief executive Ted Smith said: “The securitisation was based on a bigger estate and therefore we struggled with the covenants.”