the agreement reached with the majority of creditors paves the way for an accelerated safeguard procedure

This is news that will allow Orpea to move forward with its financial restructuring plan. In a press release published on Monday March 13, the private group of EHPAD and senior residences announces that it has reached an agreement, in these terms:

“Around 51% of the company’s unsecured financial creditors have adhered to the “lock-up” agreement signed on February 14. They had until last Friday to do so.

Orpea specifies that these lessors hold a total “regarding 1.9 billion euros” they this.

As a reminder, the agreement of lock-up plans to erase 3.8 billion euros of debt from the group out of a total of 9.7 billion, by converting them into capital. It also stipulates that investors bring 1.55 billion euros of fresh money to the group. At the same time, Orpea will come under the control of a group led by the Caisse des dépôts et consignations (CDC), which also includes insurers – including CNP Assurances, Maif and MASCF – as well as a group of creditors.

Orpea validates its takeover by Caisse des dépôts

Upcoming launch of an accelerated backup procedure

In any case, this majority support opens the way to “the opening of an accelerated safeguard procedure” that the group intends to solicit “in the next few days” at the Commercial Court of Nanterre (Hauts-de-Seine). The purpose of this procedure is to “implement its financial restructuring plan”.

Because the group has been in difficulty since the publication in January 2022 of the book-investigation “Les Fossoyeurs” by Vincent Castanet. The latter revealed mistreatment of residents and financial irregularities in the establishments of the group, present in 22 countries and which manages some 350 establishments – retirement homes and clinics – in France. The journalist accuses Orpea of ​​having set up a “system” to optimize its profits to the detriment of the well-being of residents and employees.

At the end of last April, the Nanterre public prosecutor’s office opened an investigation into the private group Orpea, suspected of institutional mistreatment and embezzlement of public funds.

Since January 2023, in 14 months, the number one French retirement home has lost more than 95% of its stock market value.

However, this did not prevent him from obtaining 600 million euros in additional credits last week from “large French banks”, pour “cover its liquidity needs” until the completion of the capital increase. A sum that the group has promised to complete by selling “1.25 billion euros of real estate assets” by the end of 2025.

The Orpea group obtains 600 million euros in additional credits

(with AFP)