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UPDATE 1-Southern Cross to update on rescue plan, home sales
June 6, 2011 / 10:18 AM / 6 years ago

UPDATE 1-Southern Cross to update on rescue plan, home sales

* To sell 50 active care homes -- source close to company

* Will update investors on July 12

(Adds details)

LONDON, June 6 (Reuters) - Embattled British care homes provider Southern Cross Healthcare SCHE.L said it would update investors on its financial battle for survival on July 12 after it unilaterally slashed the rent it pays its landlords.

The group, which cares for about 31,000 mainly elderly people in 750 care homes, announced last week it would cut its payments to landlords by 30 percent during the summer in a bid to avert collapse.

Southern Cross has been crippled by a combination of rising rental costs under its long-term leases, lower admissions and its local authority payers cutting fees. A source close to the company said on Monday the group was looking to sell its 50 “active care” homes, which provide care services for people with physical and learning disabilities.

It is also considering the closure of 30 homes and said about 100 could be taken over by rivals, The Sunday Telegraph reported citing sources. [ID:nLDE75409F]

Its shares, which were valued at 609 pence in 2007, were unchanged at 6.3 pence at 1002 GMT.

Reporting by Paul Sandle

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