Nursing care provider Orpea announced a financial restructuring on Wednesday giving bondholders the lion’s share of control as it looks to recover after charges of malpractice at its homes. The French group has 24 nursing homes in the Republic, with more than 2,100 beds.
Orpea’s shares fell more than 30 per cent in early trading following the news before paring losses to stand at €6.30, down 11.5 per cent.
Orpea will cut its debt by around €3.8 billion and receive a cash equity injection of €1.55 billion under the deal reached with state financial institution Caisse des Depots & Consignations (CDC) and other investors.
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The main group of investors will hold around 50.2 per cent of Orpea’s capital and unsecured financial creditors will own 49.4 per cent, Orpea added in a statement.
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Its unsecured financial debts will be convertible into equity, while there will be capital increases to fund the new cash equity injection.
Orpea’s shares slumped by 93 per cent in 2022 after a book highlighted potential malpractice at its care homes.
French police carried out raids on Orpea care homes last November, while an independent audit found evidence of financial wrongdoing.
Orpea has said it has taken steps to improve its business practices. – Reuters
