A prominent hedge fund in the US has taken over a controlling stake in the UK care homes operator New Century Care (NCC) as part of a debt restructuring deal with state-backed lender Lloyds Banking Group.
Sky News, citing people close to the deal, reported that US-based Anchorage Capital Group (ACG) has acquired about £80m ($134M, €98M) worth of debt from Lloyds to take a controlling stake in NCC, one of the UK's largest care home businesses.
The deal has made Anchorage a "cornerstone shareholder" of NCC, which operates 27 sites with 1,280 beds across Britain and employs 1,600 staff. There would not be any redundancies or closures at NCC due to change in ownership structure, according to Sky News.
Lloyds was able to conclude the transaction at a time when financial investors increased their scrutiny of the ownership of the sensitive healthcare business, Sky News said.
Sources told the news service that privately-owned Anchorage had been introduced to Lloyds by the management of NCC, led by its founder Paul Warren. Warren and senior colleagues will continue to own a sizeable minority position in NCC, according to them.
"The sale (of the debt) took place in the full view of the company's management," a source said.
Anchorage and NCC have been in talks for several months about the deal, Sky News added.
In a statement, NCC welcomed its new cornerstone investor, with whom it plans to build on "high standards of care and quality of service".
"ACG will work alongside NCC's founder, Paul Warren, who will retain a significant stake in the company, to support the growth and development of the business," the group said.
"The management team and staff at New Century Care are now looking forward to working with our new partners at Anchorage, and to receiving the operational support and expertise which will enable us to grow our high-quality care offer," Warren said.
Lloyds's decision to offload the debt it had held in NCC for several years is part of its financial restructuring in which the group is divesting assets held on its balance sheet, an insider told the news service.
The government-backed bank has recently been selling a number of its distressed loan portfolio in order to strengthen its balance sheet.