Royal Bank of Scotland (RBS), Credit Suisse and several other banks face combined losses of up to £400 million (Dh2,926m) from their exposure to Qatari investment vehicle Delta Two's £1.4bn acquisition of nursing home chain Four Seasons, according to news reports.
"The consortium of banks that backed the takeover of the Four Seasons nursing-home chain… is facing combined losses of up to £400m from its exposure to the £1.4bn deal," noted a report in Times Online.
Weekend reports identified RBS, which led the deal and has a seat on the Four Seasons board, as one of the worst hit and is believed to be facing a £100m loss. Ten other banks, including Credit Suisse, are looking at combined losses of the remaining £300m.
Delta Two has already had to inject a further £100m of equity into the company to avoid breaching banking covenants. Four Seasons Health Care is in deep financial trouble. Its £1.5bn of borrowing is due for refinancing in the next three months. One of Britain's biggest nursing and care home groups, Four Seasons has its £1.24bn senior debt due on September 2, and has paid a sum to avoid breach of covenant on its facilities.
If the firm, which was bought by Qatari investors two years ago, fails to raise debt to refinance its loans, the private equity owners may not put up money to ease the situation.