Orpea: Minority shareholders and creditors dismissed by the courts which validate Orpea’s safeguard plan

(BFM Bourse) – The commercial court validates Orpea’s safeguard plan, a decision which paves the way for a restructuring of the operator of retirement homes, which can be implemented no later than mid-November, normally.

Commercial justice on Monday gave the green light to the safeguard plan for retirement home giant Orpea: the group should be able, from November, to erase part of its debt and come under the control of a group of shareholders led by Caisse des Dépôts.

The Nanterre commercial court rejected all the requests filed by creditors and minority shareholders and therefore validated the plan of the current management of the company, according to the decision consulted by AFP.

A major restructuring to come

Orpea will however have to wait, before applying its project, until the Paris Court of Appeal has validated, “no later than November 13”, a final point in the procedure, namely the authorization given by the Financial Markets Authority (AMF) to proceed with the restructuring without going through a public takeover bid (OPA).

Justice validated this point at first instance, but opponents appealed. A hearing before the Court of Appeal is scheduled for October 5. The plan provides in particular for the transformation of 3.8 billion euros of unsecured creditor debt into shares. Orpea’s net debt will thus be reduced by 60%.

At the end of the operations, the group led by Caisse des dépôts, the financial arm of the State, with Maif, CNP and MACSF (Mutuelle des professionals de santé) should take 50.2% of the capital through a capital increase of 1.55 billion euros.

“A fundamental step” for Orpea

The decision rendered on Monday constitutes a “fundamental step” for Orpea to regain financial balance and thus be able to devote itself to its “priorities”, namely the “well-being” of its 76,000 employees (including 28,000 in France), as well as of its residents and patients, commented to AFP the general manager Laurent Guillot.

“I don’t see any opposition between profitability and quality,” added the leader, for whom the important thing is first to restore quality – “profitability will come later”.

Weighed down by a strategy of massive real estate purchases, particularly internationally, Orpea found itself in great financial difficulty in the wake of the publication of the book “the Gravediggers” in January 2022. Journalist Victor Castanet revealed the financial embezzlement of the former management and the mistreatment inflicted on residents and employees.

“The company’s reputation has been tarnished, clearly”, hence “a drop in the occupancy rate at the start of 2022”, but “we are going to do everything to make it fade and we are starting to see the first results”, assured Laurent Guillot, who arrived at Orpea after the scandal.

“When the time comes”, the company, because it “has changed and is still changing”, could take on a new name, perhaps in the first quarter of 2024, according to the general manager.

(With AFP)

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