Southern Cross chief stands down after property sell off
Beleaguered health group Southern Cross yesterday announced that its chief executive Bill Colvin is standing down after it revealed it would have to sell yet more properties to pay off debt.
The UK’s largest care home operator said that Colvin – who will not receive a pay out – will leave the board by “mutual consent” by the end of the calendar year. It follows the departure in June of finance chief Jason Lock, who left when the firm said it would have to extend a credit facility with it banks.
Colvin, who was previously a nonexecutive chairman at the firm, took over as chief executive in December.
The group said Colvin would stay to work on the group’s refinancing and that the search for a new chief executive had begun. Meanwhile, the sale of seven homes – expected to pull in around £20.7m – comes on top of the sale of a further nine last week, providing the firm with £51.8m towards repaying an £82m loan. Southern Cross will continue to operate the homes, renting them back from the new owners.
The company took on the debt when it bought Portland, a care home firm with 20 properties, in March for £42m – a move which most analysts say overstretched the group.
And the sale of the properties has left the company with a £9.1m loss, after being hammered by the fall in property prices.
Investec analyst Sebastien Jantet said finding a new chief executive would not be an easy task.