“Southern Dis-Comfort”

It was only a few weeks ago that I was writing what I hoped might be the final chapter in the story of the plight of Southern Cross’s 130,000 elderly residents (click on “Southern Cross” in the TAG CLOUD).    Goodness knows those residents have been through enough worry and uncertainty about their future.    After being completely disowned by the Government and ignored by the CQC, who is supposed to safeguard their vulnerability, they were finally passed back to their over-mortgaged landlords.

The biggest one of them is Four Seasons, whose majority shareholder is the dodgy-these-days Royal Bank of Scotland, with a 40% stake.  Not far behind in ownership is the Qatar Investment Authority.  Both companies are known for their love of older people – at least as a commodity.

Four Seasons, with 500 properties and with 25,000 residents, is now the UK’s largest nursing home operator.  It has the minor problem of repaying £780 million in loan debt by September.   Nothing to concern the Government or CQC about there then !

Not to worry, hope is on the horizon.  A very nice group of people in America, who are very, very interested in old people, are quietly buying up some of Four Seasons loans. It is a strange idea, buying up loans from other people.  Only sharpe-suited financiers and body-guarded East End loan sharks really understand the not so subtle finger-breaking techniques of debt collection.  I guess they must have seen the real potential in the UK elderly market, having watched Southern Cross go bust.

These ever-to-be or never-to-be trusted investors are Kohlberg, Kravis, Roberts (KKR).  In the 1990’s they were so liked that a book was written about their hostile takeover of RJR Nabisco entitled “Barbarians at the Gate”.  It’s all about greed,  asset stripping, redundancies and  company break-ups.  No doubt the Government and CQC will consider them ideal partners to look after our frailest older people.

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One Response to “Southern Dis-Comfort”

  1. John Southern Cross rumbles on, like a ball of moss down a hill, and attracts fluff and dung beetles, and many more things that cling to it. It is time to take stock and maybe examine the beast, in all its finery.
    I sense the moneyed men smell a dollar to be made: How and why is the question? What do they get out of the deals to be made?
    I hypothosies that the tenants of the Southern Cross Empire I assume are many, and have varied interest and reasons for selecting Southern Cross or its successors.
    From my stand point all the tenants have a state pension, some will have a supplementary pension from their employment, and some I suspect have personally invested their savings in a property agreement? Or this may not be true in some cases or at all? However the basic point I make on behalf of the now proposed investors is they have a society with a guaranteed income, above the minimum wage, with possible savings and again possible investment involvement. Unless UKPLC goes bust this minimum wage income is absolute in this world of changing fortunes, and a safe bet for a good return, and if there is a financial recovery then the asset value is a prize to behold.
    The selling and passing on of debit is not a social argument or equitable agreement but a sound financial one, and I am sure the purchasers of the Southern Homes Group of Companies would pursue the debt beyond the grave, and sue the surviving relatives and family.
    This raises as many issues as it solves and makes the agreement by one generation for which they made in innocence for peace of mind into a an agreement for life for Usury ( offering a debit which the lender knows cannot be paid back). Both sides if they are not responsible are open to criminal and moral judgement. That is where this sorry fiasco of Southern Cross is going.
    The Governor of the Bank of England and the Politicians are not helping by quantative easing it makes real money and trust apparently worthless? One cannot spend money one has not got, and the next generation will be sold into slavery to the rich few, it is morally corrupt view, and someone somewhere should have a swift kick up the backside.
    A very disgruntled voter.

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