The firm’s landlords say they have made “significant financial concessions” to avoid closing any homes Southern Cross is to hold a crisis meeting with landlords, lenders and the Department of Health later.
The care home provider, which is unable to meet rent payments on its homes, hopes to reach an agreement on its financial future with its creditors.
Of central importance is how to ensure continuity of care for the 31,000 people at the firm’s 751 homes.
Contracts to operate between 250 and 400 of those care homes are expected to be lost by Southern Cross.
“The current expectation is that Southern Cross will survive, but massively slimmed down and trading under a different name”
But the biggest landlord, NHP, which owns 249 of the homes, is expected to stick with Southern Cross.
The government has been putting intense pressure on landlords not to abandon Southern Cross altogether, according to BBC business editor Robert Peston.
The landlords met on Monday, and are expected to table their own proposal for the firm’s future.
It comes after the troubled Darlington-based firm said last month it would stop paying about a third of its rental bill.
“The landlords have agreed in principle that they will make significant financial concessions in order to achieve a sustainable solution,” said Daniel Smith, who chaired their meeting on Monday.
“Our overriding concern at this time remains minimising disruption and concern for residents and their families.”
The 80 landlords will now put forwards their joint proposal, which was designed to avoid any closures of care homes, at the creditors’ meeting on Wednesday.
In return, they are looking to the government and lenders to agree to write off some of the money Southern Cross owes them.
Under their joint proposal, individual landlords would reportedly be given various options, including:
taking back homes and running them themselvestaking back homes and bringing in a new operatorsticking with Southern Cross, who would bring in new management.
Southern Cross is the UK’s largest care home operator, employing 44,000 staff, of which the company has already said it will cut 3,000.
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