French nursing home giant Orpea wants to raise 2 billion euros to deal with the debt

Nursing home giant Orpea plans to ask investors for nearly €2 billion as part of its debt restructuring, according to people familiar with the matter.

An equity injection would likely account for about two-thirds of the amount and the rest would come from new senior secured debt, said the people, who asked not to be named to discuss private information.

Since entering the market here, Orpea has grown to become Ireland’s largest private care home operator with more than 2,100 beds in the Irish market.

Shares of the French company reversed earlier gains following the news, falling as much as 5.7 percent, while bonds due 2025 traded nearly 20 cents against the euro.

The embattled French nursing home operator plans to convert €4.3 billion of debt into equity and alter other debt instruments as part of a €9.5 billion debt restructuring.

Orpea is struggling with its debt burden following a scandal over reports of the treatment of nursing home residents and allegations of financial misconduct. Soaring energy costs are worsening the consequences of a book called The Gravediggers, which singled out the company’s top executives for putting profits ahead of the welfare of elderly patients and rationing items like groceries and diapers.

The company already received €1.73 billion in secured debt from banks in May as part of a financial plan that included the sale of real estate. But the deterioration in the property market has jeopardized Orpea’s timeframe for selling the assets, it said last week.

A spokesman for the company declined to comment on the new proposal.

Orpea has appointed Rothschild and Perella Weinberg Partners as financial advisors, and White & Case and Bredin Prat as legal advisors, the company announced last month. French nursing home giant Orpea wants to raise 2 billion euros to deal with the debt

Fry Electronics Team

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