Four Seasons considers options as debt mounts and earnings fall

UK care home group Four Seasons has appointed Blackstone Advisory Partners to assess its options amid reports the company's owner, Terra Firma, is looking at new avenues to tackle sliding earnings and mounting debts.

The group, which has borrowings of £525m, is reportedly considering a number of options including debt refinancing, splitting the company up and a debt-for-equity swap.

The news comes just a month after the company suffered a downgrade of its credit score to "junk" by ratings agency Moody's, which also predicted the company's annual earnings would come in "significantly short" of the prior year's £93.9m.

Four Seasons, which provides care for around 20,000 residents living across 450 homes and 60 hospitals, has struggled against rising staff costs and tighter council budgeting since private equity group Terra Firma bought the company for £825m two years ago.

According to the Sunday Times, Terra Firm founder Guy Hands is planning to split the company into three, with one part focused on NHS patients, a second on private patients and a third on those requiring specialist treatment.

The publication explained that the division would be reliant on the company's ability to untangle the loans Terra Firma originally used to purchase the company.