-3x Short China Discussion Threads

[joe the plumber] 08/6/2011 19:34

Anyone watching channel4

[bridge2far] 08/6/2011 15:17

Maybe they have already made some assumptions on which homes they will no longer be operating!!!

[susiebe] 08/6/2011 14:59

selkirk69

It said that managers,administators wouldnt be affected so can only leave the people who give the hands on care eg nurses,carers and also kitchen staff/cleaners/laundry staff etc the loss of will have great impact on patient care.Some of the SC homes I've been are already quite stretched.

[selkirk69] 08/6/2011 14:49

susiebe
It didn't say what staff, I would imagine it includes managers etc.

[susiebe] 08/6/2011 14:31

I don't understand how the loss of 3000 staff won't affect patient care.

BTW I am a nurse who has worked in some Southern Cross homes

Surely it will cost them more if they have to use agency staff

[boffster] 08/6/2011 13:17

Well, it can't be said that they're not trying to survive.

[selkirk69] 08/6/2011 12:13

A very postive step being taken there, although I do feel for those 3k that will lose their jobs.
This is as a result of the New Horizons project so was going to happen anyway despite the sh1t they're in.

Quick calc.
Definately not all front line I would think.
3,000 times £10k = £30m

[stud-muffin] 07/6/2011 15:25

Then again... perhaps not.

Some big buys, few sells but down she goes.

[stud-muffin] 07/6/2011 09:24

Is there a buyer about, share price up with a handful of buys but also some sells.

Normally this share moves quite predictably (well given the circumstances) and yet the bid has held at 6.028p

I expect this to tick up a little further - I will take 8p BTW.

[selkirk69] 07/6/2011 09:04

There does seem to be options which is encouraging, although for every positive I can find a negative but it ain't over yet.

[nermil] 07/6/2011 09:01

Another option on the table apparantly. This would not involve Southern Cross continuing

[nermil] 07/6/2011 09:00

How would Blackstone buying the debt impact on Southern Cross as a going concern?

[selkirk69] 07/6/2011 08:15

Bits and pieces starting to emerge.

[dcroston] 06/6/2011 10:19

No sign of dealy these days, is he out?

[pwhite73] 05/6/2011 10:28

Southern Cross will definitely survive the only question for PI's is will the shares remain listed. Everything else is immaterial.

[dmf] 05/6/2011 10:22

Is there still life in Southern Cross?

[selkirk69] 04/6/2011 11:25

An interesting read...

[bobsidian] 04/6/2011 07:35

"...No one knew what was going to happen [in 2006]. No one has seen a financial crisis like we have. It has taken everyone by surprise. It [the Southern Cross structure] was a model not equipped to withstand it."

A ridiculous cop-out comment. Symptomatic of many who thought that debt could be accumulated and its ultimate repayment deferred ad infinitum and without consequence. The moment short term financial considerations took hold so the beginning of the end was sewn. You can be sure that senior management have been handsomely rewarded for their "endeavours". And the very presence of goodwill on the balance sheet reflects the overpayment for businesses and assets relative to their underlying values.

Not the only business haunted by debt accumulated during the "good" times. And any business with a modicum of a financial buffer against the uncertainties of life has and continues to be seized by asset strippers to leave that business constantly operating on a financial knife-edge and fated to be held hostage by short term considerations. All too often the financial and legal professionals advise the owners and managers of businesses to take every penny earned and generated and more out of the business and leave all of the the risk with the creditors and financiers. Is this really the best that capitalism has to offer ? Creative destruction is all good and well, but we are talking here about a business directly affecting the lives of people.

Shocking and shameful but sadly unsurprising.

[sportbilly1976] 03/6/2011 13:06

Well as some of the rent to the LL will have started to be due from the 1st, some of them have already received 30% less than they were contractually entitle to.

Effectively SCHE have defaulted on their agreement - the LL's can force their security (which is what the LL's lenders would do)

also they seem to be being squeezed harder on costs due to falling morale & staff retention - some of those 44,000 staff would (as has been posted on here) have been on just over national minimum wage - to replace them they will be using agency nursing staff on almost double NMW.

I'd give it a week or so until one of the LL's issues a winding up petition....(some of the LL's will be defaulting on their loan agreements from their lenders as a result of the unagreed 30% reduction)..and once one does, the rest will jump on board to be included.

[krupatel] 03/6/2011 11:01

The man who made £13 million from Southern Cross believes that ministers should let the care home business fail and says that board directors must share blame for the company's plight.

In an interview with The Times, Philip Scott, who built the company into the biggest elderly care provider, also accused its new bosses of scaremongering. He said that directors, including Baroness Morgan of Huyton, the new head of Ofsted, who had been brought on to the board because she had been Tony Blair's policy chief, were partly responsible for the decline.

Southern Cross, which has 31,000 residents in 750 leased homes, has warned all its landlords that it will withhold 30 per cent of its rent while it seeks a financial backer.

Mr Scott, who resigned four years ago and now runs the Priory rehabilitation clinics, said that the homes should be transferred to their owners. "Southern Cross are just playing hardball," he said. "Somebody will sue them. If Southern Cross are interested in doing the right thing for their residents, they should begin an orderly handover."

Mr Scott, an Irish psychiatric nurse, took over the running of Southern Cross when it was a small provider with 40 homes in 2000.

The private equity specialists Blackstone financed an expansion that made it market leader, looking after nearly one in ten of all elderly in care. Southern Cross floated on the Stock Market in 2006 and Blackstone sold its stake, making a total of £2 billion.

Mr Scott sold his shareholding in 2007. He said he had received £13 million from his time at Southern Cross.

He defends the business model, in which care home freeholds were sold and the buildings leased back. He is one of the landlords affected as an investor in Zest, which owns four homes.

He blames the current bosses for the company's inability to pay the rent. He said regional managers now had to supervise 22 homes instead of the six in his day, making it harder to maintain standards. Figures seen by The Times show that, since 2008, the rise in central costs and the fall in the proportion of rooms occupied account for more than twice the rent increase.

The current bosses blame the business model that they inherited, with high rent obligations, for their plight.

"Every single transaction [the board] had to sign off. They accepted the sale-and-leaseback model was the way to grow." Of the crisis, Mr Scott said: "There has to be responsibility for all of the non-executives. I wouldn't think Sally Morgan stands alone for what has happened but she shares the blame."

Mr Scott pointed out that Lady Morgan had been a non-executive director since the days of flotation. The peer, who earns £53,000 a year from Southern Cross and has just been appointed to the schools inspectorate Ofsted, was chosen because she had been Mr Blair's political secretary. Mr Scott said that she had been brought into the company because of the value of her insight into government thinking on healthcare.

Ministers have been under pressure to rescue Southern Cross but Mr Scott urged them to stand firm. "Should they be rushing to the aid of Southern Cross in RBS style? They shouldn't." When Southern Cross announced that it would withhold rent it said that its primary concern was continuity of care. Mr Scott said the company was scaremongering by implying care was in the balance. If the homes were handed to new operators, residents would continue to be well looked after.

A Southern Cross spokesman said that costs had risen because management inherited a business with no human resources department and inadequate payroll and training.

There had been a reorganisation to improve care. The fall in occupancy, from above 90 per cent to 85 per cent, was blamed on industry-wide problems with local authority placements. The spokesman denied scaremongering. Southern Cross stressed that Lady Morgan was only a non-executive director rather than one of the team running the company.

He added: "Yes, she is on the board. No one knew what was going to happen [in 2006]. No one has seen a financial crisis like we have. It has taken everyone by surprise. It [the Southern Cross structure] was a model not equipped to withstand it."

Lady Morgan could not be reached for comment.

[kimboy2] 02/6/2011 18:30

Bit on the beeb;

[aspers] 02/6/2011 16:27

Good to see the shorters arriving in force.....allow me to pick more up at bargain price.....the shorters will all be crying in their tea within a fortnight!!

[lej2] 02/6/2011 15:57

selkirk

Re Waterfall Do we know who MM Gurvitz is (or was)?

[selkirk69] 02/6/2011 15:51

bergster56
not entirely right, they do own at least one property which was valued last year at £14m, probably £10m now, could be the reason why this hasn't fallen further. Homes sold off to individual operators, not sure about that, if SC can't make money how can they, there's a lot of the numbers involved here, returned to LL's, not sure about that either I'm afraid, LL's won't have the skils/knowledge to run them.
Although I do agree that it ain't looking too good.

[bergster56] 02/6/2011 15:45

there is absolutely no incentive other than a cheap political point, for cameron to step in like some sort of he-man here.

The tories have spent the past 12 months squeezing LAs, they are not about to undo all of that by bypassing LAs and giving money direct to southern cross.

This is completely dead. Will go bust with homes being sold off to individual operators to run or returned to landlords to operate.

Share price imho will move to sub 1 pence in the coming weeks. What's to stop it? Its not like there's any asset value in this