Four Seasons debt for equity swap likely

Four Seasons Healthcare, the troubled nursing homes business saddled with £1.3bn of debt, is in ongoing talks with its lenders as it tries to restructure. One source said the likely outcome is a debt for equity swap to leave it owned by its banks.

The firm has held merger talks with the Priory Group, owner of the Roehampton rehabilitation clinic used by celebrities. However, Four Seasons said "a consensual restructuring" is its preferred route.

Buyout firms, whose investments are often struggling under debt built up in the pre-2008 boom, are considering radical measures like combining troubled investments into new companies in a bid to produce viability.

The Priory merger would have created the UK's biggest mental health and nursing company. Dutch bank ABN AMRO, which RBS, a Four Seasons creditor, took over last year, bought the Priory in 2005.