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Southern Cross to transfer 250 care homes

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More than 250 care homes run by Southern Cross are to be transferred to new companies by this weekend as part of plans to shut down the sector’s biggest operator.

Darlington-based Southern, which runs 752 sites and has 31,000 residents, said more than a third of its homes will be transferred to about 20 new operators, believed to include rivals Four Seasons and Bondcare.

These will be the first homes to be moved from the ailing care home giant since it announced it had no choice but to close after landlords refused to drop their rent to help it survive.

Southern also said it is “very confident” all of its homes will be transferred to new operators by November 1, and none of its sites are expected to close.

NHP, which owns 249 of Southern’s homes, is to form a new care home operating company in conjunction with Court Cavendish, a healthcare turnaround specialist headed by industry veteran Dr Chai Patel. The remainder are expected to be taken on by rival operators and landlords, although negotiations are ongoing.

A spokesman said: “The key aim throughout the restructuring process has been to ensure there’s no disruption for residents and we are highly confident that all the homes will transfer on schedule.”

“The vast majority” of Southern’s 43,000 staff are expected to transfer to the new operators although a small number of redundancies are expected, particularly in administrative roles in Woking.

After all the sites are transferred, Southern will be wound down.

Southern hit the rocks because it was struggling to pay its rent as fees from local authorities and occupancy rates declined.

The group had tried to negotiate a deal with its 80 landlords to enable it to survive, but they walked away.

Southern chairman Christopher Fisher said: “The demise of Southern Cross is a matter of considerable regret.

“It has involved the loss of all shareholder value as well as a loss of value for our principal creditors, and will entail a number of job losses for our central staff.

“Nevertheless, in relation to the challenges we have faced this year the final outcome now in prospect represents a considerable achievement, and I would like to thank all those who have worked so hard to that end.”

Care services minister Paul Burstow said the announcement is “an important milestone” in transferring the homes to new operators while ensuring that residents’ care is maintained.

He said: “Throughout, it has been the government’s overriding concern to secure the welfare and safety of the 31,000 residents in Southern Cross’s care.”

Southern Cross has not revealed which homes are to be transferred by the weekend.

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