Southern Cross Healthcare Agrees to £31.1 Million Sale Leaseback of Nine UK Care Homes

RTTNews - August 29, 2008

Southern Cross Healthcare, a provider of UK care home services, announced the sale and long-term leaseback of the freehold interests in nine care homes to a subsidiary of Daejan Holdings Plc for £31.1 million.

The gross asset value of the nine freehold interests is £37.2 million. The company said it would incur a book loss of £6.1 million on completion of the sale. It will pay £2.5 million for these homes as annual rent (8.0% cap rate.)

The company said it will use the proceeds from the divestment to partially pay down two syndicated credit facilities and a bilateral credit facility put in place earlier this year to fund additional acquisitions and developments.

Further, Bill Colvin, chief executive of Southern Cross, said, "Discussions are ongoing with other potential purchasers regarding further 20 freeholds to be divested and the proceeds from any sale will also be used to further reduce borrowings. Southern Cross is continuing to discuss with its banking syndicate the provision of longer term funding arrangements for the Group." Sphere: Related Content