The Irish arm of embattled French care home group Orpea has insisted the parent group remain committed to its operations in Ireland even as it seeks a €9.5 billion debt restructuring.
rpea has 24 care homes in Ireland with more than 2,100 beds, making it one of the largest care home operators in the country. The Irish unit posted a loss of 22.6 million euros last year as it amortized the value of recent acquisitions.
Last year, Orpea acquired Mervyn Smith’s Firstcare nursing home business for around €100 million.
In France, Orpea’s offices were raided as part of an ongoing investigation into alleged misconduct in care homes there. The group was forced to enter talks with lenders to restructure its debt as it faced breaches of contract. The group used cheap money to embark on a debt-fuelled expansion. Last month, Orpea announced that it plans to conduct a €3.8 billion debt swap that will effectively wipe out many shareholders. It will also raise at least 1.3 billion euros in capital.
The company’s shares plummeted earlier this year after a book published in France exposed alleged patient abuse and dubious accounting practices.
Newly filed accounts for the group’s Irish business, signed less than a week ago, insist the parent remains committed to their care homes in Ireland.
The Irish entity has a €307 million loan from its parent company. Earlier this month, the French group confirmed that the loan can be repaid at the end of December 2024 at the earliest.
The Irish division also had €86.2m in bank loans at the end of 2021, all of which were due to be repaid in either 2022 or 2023.
“The Group has worked closely with its lenders since the period end and has refinanced €25.3 million in loans with new repayment dates of March 2024,” said Irish Division Directors.
“The group’s remaining credit facilities of EUR 60.3 million and EUR 704,000 are due for repayment in March 2023 and December 2023, respectively,” they add.
The financial statements indicate that the debt restructuring process in France is still ongoing for the parent company.
“Orpea has provided Directors with the necessary assurances specifically in relation to Irish operations that Ireland is a key and value-added healthcare market for Orpea and that it is committed to funding its committed development investments,” the accounts for the Irish Arm read .
The Irish entity has invested heavily in care home real estate and is currently building four greenfield sites which will generate a further €25 million in development costs over the next year.
Directors of the Irish division said it generated €24.8 million in cash from operations last year.
“The company expects to continue to generate profitable earnings before interest, taxes, depreciation and amortization,” they added. “It is forecast to generate positive free operating cash flows beginning in 2024 and to maintain cash positive through 2023.”
Revenue last year was €74.6m compared to €34.7m in 2020. It made an operating loss of €13.8m in 2021 compared to a profit of €3.5m in 2020 year 2020.
