Care-home firm looking after 31,000 elderly and vulnerable people begs landlords such as Ian and Richard Livingstone, Nick Leslau, Nigel Wray and Tom Hunter for rent cuts Some of Britain’s richest property barons, including Ian and Richard Livingstone, Nick Leslau, Nigel Wray and Tom Hunter, will decide the fate of more than one in seven Southern Cross care homes as the crisis-stricken company goes cap in hand to landlord groups asking for rent reductions . The company, which looks after 31,000 elderly and vulnerable patients, insists it will go bust if it is required to pay rents at agreed levels. Landlord groups are currently receiving only 70 pence in every pound billed in rents to Southern Cross. The group, Britain’s largest operator with about 753 homes, wants to negotiate a deal with all 80 of its landlords and has given itself four months to do so. Landlords are engaging through a committee set up by Daniel Smith at Grant Thornton, but some are already talking of taking matters into their own hands. Jamie Buchan, chief executive of Southern Cross, estimates that the business could lose about 200 homes. Among the options he would like to explore with landlords is a debt-for-equity swap or some kind of similar deal that would give them a share of future profits. He also wants to ditch the Southern Cross name. The GMB union is urging the government to step in and appoint a cabinet minister to ensure a swift, orderly resolution to the care homes crisis. It will publish a report naming those in the City it believes are to blame for the firm’s difficulties. “This report shows the reality that they are either greedy pigs or gullible fools.” Among the most important landlord firms Southern Cross will have to win over to survive is London & Regional, the investment empire of former optician Ian Livingstone and his chartered surveyor brother Richard. The pair hold the freeholds to about 90 Southern Cross homes. The brothers, who have a joint fortune put at £1.2bn, control an £8bn global property empire which in the UK includes the Hilton hotel on Park Lane and the Empire Leicester Square cinema. Their London & Regional operation also includes the David Lloyd Leisure fitness group and a string of nightclubs and casinos. Also being asked to accept a rent reduction by Southern Cross is a company called PSX Holdings, which acquired 21 properties from Southern Cross in a sale-and-leaseback deal in 2005. PSX is owned by Prestbury, the investment vehicle of Nick Leslau and Nigel Wray, with the retail tycoon Tom Hunter and Uberior, a private equity investment arm of HBOS, now part of the taxpayer-backed Lloyds Banking Group. PSX’s latest accounts, signed off in February, appear to show little sympathy for the care-home firm, suggesting the crisis was of its own making. “The future of Southern Cross currently seems uncertain. Whilst the tenant has negligible net debt, it claims to have overstretched itself by entering into a sale-and-leaseback model across its entire estate where it is now claiming the rents it is paying are too high.” Another large landlord, Bondcare, which operates homes itself as well as renting out properties to rivals, has taken an even harder line. “Our suggested solution is to take back the operation of our homes and we have offered the same solution to other landlords to deal with this crisis,” it said last week. The ownership trail for Bondcare, which owns about 40 Southern Cross homes, disappears into a trust based in Gibraltar. Negotiations with the largest landlord NHP is complicated by the fact that its effectively in the hands of creditors after poor performance rendered shares owned by the Qatar Investment Authority worthless. Southern Cross Healthcare Healthcare industry Private equity Social care Social care Simon Bowers guardian.co.uk