Terra Firma’s Four Seasons negotiates profits covenant waiver

Ellie Pullen
05 January 2015

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Terra Firma portfolio company Four Seasons Health Care (FSHC) reportedly negotiated an agreement with its lenders to remove a profits-related covenant.

At the end of December, FSHC agreed to a revised corporate credit facility with its lenders. The existing 7.5x gross leverage covenant for its £40m corporate credit facility was replaced with a gross super senior leverage covenant. The revised facility matures in December 2017.

According to reports, the covenant that Terra Firma and FSHC have reportedly managed to waive was profits-related. A representative for Terra Firma declined to confirm this.

Earlier last year the company was restructured into three business lines: dementia and nursing care; private residential and nursing care; and specialised services in mental health and brain injury. Each division has its own CEO and senior management team.

It is believed that Terra Firma is looking to sell off each unit of the business separately; in November, the GP appointed Blackstone to oversee options for the business.

Terra Firma acquired FSHC in April 2012 from Royal Bank of Scotland and other banks. The deal valued FSHC at £825m; Goldman Sachs and Barclays arranged a debt package for the deal, believed to be worth around £500m.