19/07/2011 02:03 BST | Updated 17/09/2011 06:12 BST

Former Boss Of Priory Clinics Steps In To Rescue 249 Care Homes

PRESS ASSOCIATION -- A former boss of the Priory clinics has stepped in to help rescue 249 care homes facing an uncertain future following the demise of Southern Cross.

NHP, which owns a third of the homes currently run by Southern, will form a new care home operating company in conjunction with Court Cavendish, a healthcare turnaround specialist headed by industry veteran Dr Chai Patel.

Staff working at the homes will be kept on to ensure a seamless transition to the new operator, the two groups said.

Dr Patel, who re-established Court Cavendish in 2007 after the Priory chain of rehab clinics he led was sold in 2005, said: "We hope this announcement is the start of bringing to an end the uncertainty that residents, their families and staff in all the homes have had to endure over the last few months."

The two companies would work towards building an integrated health and care service company, he said, with Court Cavendish holding an equity stake in the new company.

"The country cannot afford another company to go through what happened to Southern Cross," the former NHS doctor said.

Southern Cross is the UK's largest care home operator with 31,000 residents, but ran into crippling financial problems this year due to a combination of a rising rent bill and declining fees from local authorities as occupancy rates declined.

The group had tried to negotiate a deal with its landlords to enable it to survive, but all 80 of the owners of its properties decided to walk away from the group, leaving it with no choice but to announce it would shut down.

NHP said the new company will rent the same properties, but will not be subject to the same financial uncertainty that dogged Southern Cross. It is retaining £14 million of interest payments due this month and £14 million due in October to provide funding for the new operator, which will continue to use back office services provided by Southern Cross.

The new company will likely take over at the end of October after a four-month handover period.