Heritage Care - $30m Subordinated Debt Raise

Heritage Care - $30m Subordinated Debt Raise

Heritage Care - $30m Subordinated Debt Raise

Service

Business & Corporate Finance

Client

Heritage Care - Aged Care Operator and Property Holding entities

Location

VIC and NSW

Industry

Aged Care

The Challenges

  • Covid adversely affected the entire industry, with Heritage‚Äôs Victorian operations having experienced particularly harsh outcomes and reduced occupancy. 
  • Covid occurred just as the business was about to undertake a partial change of ownership and management, together with the establishment of a dedicated Property Fund to raise capital for future growth.
  • Whilst the business had the support of its bankers for existing operations, the extended lock down prevented completion of the ownership change and limited the success of the Property Fund.
Heritage Care - $30m Subordinated Debt Raise

Our Solution

  • With no equity appetite for the sector, and recognising the turnaround that would eventuate post Covid, we sourced a structured subordinated debt solution of $30m which allowed;
  • Completion of change of ownership at both the Operator and Property ownership level,
  • Repayment of existing subordinated debt
  • Reduction of senior bank debt to sustainable levels

Clients Result

  • Shareholding of both the Operator and Property holding entities consolidated into the hands of ongoing management.
  • Subordinated Lenders reduced from 2 to 1 with tenure extended over 3 years.
  • Senior Bank Debt reduced to sustainable levels and Senior Debt facilities extended on favourable terms.
  • Amortisation structured over extended terms, relieving cashflow pressures.
  • A pathway for the Property Fund to satisfy its original objectives.