NEWS
Care Home Operator agrees £9 million funding package
25/10/2011
Care Home operator agrees £9m funding package
Boutique corporate and commercial law firm Heatons LLP has advised New Care Projects LLP on a £9 million refinancing package with Bank of Ireland.
Bank of Ireland has agreed to provide senior debt finance for New Care Projects to refinance its Manorhey Care Centre in Urmston and to refinance and develop out a new Care Centre in Timperley.
New Care Projects is a Trafford based care home operator which identified a desperate need for new generation care facilities to be provided. The company’s aim is to provide high specification newly built care facilities in locations where the provision is predominated by converted stock property, adopting the principle that better buildings create better care.
The legal advice from Heatons cut across several disciplines including corporate, property and construction. Led by corporate partner Matt Fleetwood, the team also included construction partner James Flynn and corporate associate, Anoushka Pochin.
Commenting on the refinancing Matt Fleetwood said:
“This has been a challenging but extremely satisfying transaction on which to advise.
“Working with New Care in an advisory capacity to assist with on-going strategy and to help raise appropriate finance, we spent several months looking at the market and approaching various funders, including private individuals, the funds market and main stream bank lenders.”
Continued Matt:
“We were, and are, operating in a difficult market for raising finance.
“Things became more critical in the run-up to close which saw increased market volatility resulting in break fees on the existing swap increase dramatically. This needed close management to ensure that the refinance and new funding went through as smoothly as possible.”
Commenting on New Care’s plans now that the refinancing has completed, Managing Director Chris McGoff said:
“Despite the Care sector receiving negative and somewhat unjustified coverage over recent months as a result of debt laden corporate failures, the fundamentals of the business we are building remain robust. An explosion in the elderly demographic, and a divestment of the responsibilities for elderly care from the public, to the more efficient private sector, is creating a need to invest in the provision of new build facilities to meet the growing demands of an aging society. This coupled with the fact that many converted stock homes are nearing a state of obsoleteness, means that new build facilities are a must if we are to address this potentially catastrophic imbalance.”
Chris continued:
“Our strategy of focusing the delivery of new build facilities in clusters of 3 to 4 homes, within relative tight geographic proximity, means that we can maximise economies of scale through utilising shared services such as the laundry, whilst fostering more efficient supply chains. In providing such facilities to a high, but value engineered specification, in more affluent areas where there is a higher proportion of private fee payers, means that we often see a flight to quality and a quicker fill rate.”
He concluded:
“Despite the lack of senior debt funding we feel we are well poised for growth and are consistently reviewing options to attract the required investment to move the business forward.”
Other professional advisers included George Davies Solicitors (advised the Bank of Ireland) and Andrew Page of Page & Co Solicitors (advised Peter Stock).