Home Finance Orpea skips dividend, signs new financing deal to handle debt

Orpea skips dividend, signs new financing deal to handle debt

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A view reveals the emblem of French care houses firm Orpea on the entrance of a retirement house (EHPAD – Housing Institution for Dependant Aged Individuals) in Reze close to Nantes, France, February 2, 2022. REUTERS/Stephane Mahe

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  • Shares fall as a lot as 7%, then recuperate
  • Orpea places in place emergency financing ordered by court docket

Could 13 (Reuters) – French care house group Orpea, which faces legal complaints over how treats its aged residents, stated it will pay no dividend on 2021 earnings and disclosed an emergency take care of banks to deal with main debt repayments.

On the centre of allegations of malpractice that it has repeatedly denied, the group stated that with entry to monetary markets being closed off and a deliberate asset disposal programme slowing down, it had signed an settlement with its banks for a secured syndicated facility for a complete of 1.73 billion euros.

Orpea stated the financing bundle was a part of a conciliation process with its collectors and was ordered by the Nanterre industrial court docket in April.

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Orpea’s main debt repayments embody 850 million euros maturing within the second half of 2022 and 983 million in 2023, the group stated on Friday in an earnings assertion.

“This emergency financing is at a nearly-doubled price, displaying a worrying forecast,” AlphaValue’s analyst Yi Zhong instructed Reuters.

The brand new facility will weigh on Orpea, as the common price of those loans will likely be Euribor +3.9%, in comparison with a present common price of funding at 2.2%, Orpea stated.

Orpea’s shares (ORP.PA) reversed course to realize 3.7% at 1010 GMT after falling greater than 7% earlier.

Orpea noticed web revenue plunge to 65.2 million euros in 2021, from 160 million euros a yr earlier and its web monetary debt elevated by 1.23 billion euros to 7.89 billion euros finish 2021.

With the intention to cut back debt, Orpea plans to promote greater than 3 billion euros price of belongings by finish 2025, with no less than 1 billion euros of disposals by the tip of 2023, predominantly in actual property within the type of sale and leasebacks.

The agency, which operates throughout 23 nations and is one in all Europe’s largest for-profit care house operators alongside French rival Korian (KORI.PA), has an actual property portfolio valued at greater than 8 billion euros.

DECLINE IN OCCUPANCY RATES IN FRANCE

Orpea shares have plunged since a guide by an investigative journalist in January revealed extreme failings in care in an Orpea nursing house in a rich Paris suburb. learn extra

The guide has sparked debate on the therapy of aged folks in privately run care houses and the federal government plans to audit France’s 7,500 retirement houses over the subsequent two years.

The federal government stated in March it deliberate to file a legal criticism towards Orpea. learn extra

Amid what Orpea known as “a tough backdrop”, its nursing houses enterprise in France recorded a decline in occupancy charges in the course of the first quarter, whereas the remainder of the group’s actions noticed occupancy charges on an upward development.

Orpea stated it expects its income to proceed to profit from quite a few new web site openings in 2022, in keeping with a goal of greater than 3,000 new beds over the interval.

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Reporting by Diana Mandiá, further reporting Dina Kartit,
Enhancing by GV De Clercq and David Evans

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