Banks agree to delay Southern Cross tests

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Southern Cross's lenders have postponed a test of its banking covenants until 31 May as the care homes group tries negotiate rent reductions with landlords in the wake of local authority spending cuts.

Britain's largest care homes operator, with 38,600 beds across 752 properties, had not previously revealed a date for the test but had warned that a breach was "imminent". Its shares, which peaked at more than £6 in 2007, bounced back by 7 per cent to 11.25p yesterday.