Fresh moves to save 249 Southern Cross homes

Southern Cross' biggest landlord yesterday announced plans to rescue 249 care homes with a new company led by a former boss of the Priory clinics.

NHP, which owns a third of the homes currently run by Southern, will form a new care home operating company in conjunction with Court Cavendish, a healthcare turnaround specialist headed by industry veteran Dr Chai Patel.

The deal secures the future of staff at the homes and was welcomed by Southern's board, which last week indicated its intention to wind up the struggling business.

Patel, who re-established Cavendish in 2007 after the Priory chain of rehab clinics he led was sold in 2005, said: "We hope this announcement is the start of bringing to an end the uncertainty that residents, their families and staff in all the homes have had to endure over the last few months."

He said his firm would work with NHP to build a new "integrated health and care service company", in which Cavendish would hold a stake.

Southern Cross is the UK's largest care home operator with 31,000 residents, but ran into crippling financial problems this year due to a combination of a rising rent bill and declining occupancy.

NHP said the new company would not be subject to the same financial uncertainty that dogged Southern Cross.

The new firm will likely take over at the end of October after a four-month handover period.

NHP's move follows an earlier decision by landlords of 250 of Southern Cross's other homes to take them back and operate them themselves.

The fate of the remaining third of the 752 homes is still undecided.

Other care home operators, such as Scotland's Balhousie Care Group, are thought to be interested in taking over parts of the empire but there are fears that some homes will have to close and patients moved.