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The largest creditor in Four Seasons Health Care has offered to let the business to skip its upcoming debt repayment as a way to unlock talks.
Under the new proposals, the creditors have also said they will let the courts decide who has ownership over certain homes.
Both H/2 and Four Seasons have been looking to save a business that has come under significant pressure from soaring labour costs and government cuts.
In the past, the conditions to defer payment were dependent on Four Seasons relinquishing the ownership of 24 homes it may have inadvertently have given away to creditors.
The Four Seasons board is currently reviewing the new offer.
The offer could unlock discussions between advisers on both sides, which have been going on for months.
In efforts to save Britain’s largest health care operator, Terra Firma, Four Seasons’ private equity owner, had proposed to reduce its debt to levels that US lender H/2 Capital sees as unsustainable and detrimental to Four Seasons’ long-term survival.
For weeks both the lender and Four Seasons have been engaged in a public spat over a viable debt deal, threatening to put 17,000 elderly residents and 26,000 working staff in over 300 homes across the UK at risk just ahead of the winter months.
In a statement late Thursday, the lender said that deferring a key debt repayment next month “will ensure continuity of care for residents and stability for employees and all stakeholders”.
It added that “to ensure that the standstill is not impacted by the timing of the legal proceeding with respect to the 24 brighterkind homes, H/2 has proposed that the parties to the standstill agreement simply ‘agree to disagree’ and execute the standstill without further delay”.
For weeks both parties have accused each other of being unwilling to find a consensual solution as a critical loan repayment deadline looms.
A spokesman for Terra Firma Capital Partners Limited said:
“Terra Firma notes the press release issued by H2 Capital Partners at 18.48. Although Terra Firma has not seen the agreement H2 has sent to Four Seasons, we are encouraged that their press release appears to reflect Terra Firma’s long stated position that we will hand over the high yield bond group to the creditors subject to Terra Firma’s 24 nursing homes, which are currently managed by Four Seasons, being protected.”
Four Seasons was not immediately available for comment.