After the scandal, the financial setbacks… The group of private nursing homes Orpea opens a new tormented chapter, already shaken since the release in January of a book-investigation denouncing its practices.

The company announced on Wednesday the opening of a new amicable conciliation procedure before the Nanterre commercial court to renegotiate its debt with its creditors.

"The company is too indebted due to the international and real estate development carried out at a frantic pace, on the initiative of the former general management", explained the new general manager of Orpea, Laurent Guillot.

The group's debt amounted to more than 9.5 billion euros as of September 30.

A preventive procedure

“This amicable conciliation procedure allows us to renegotiate with the financial players the situation of our debt and at the same time to protect our employees and residents”, added Laurent Guillot.

The envisaged objective would be to "convert part of Orpea's debt into equity and again raise money in debt and equity from investors", he said.

This so-called preventive procedure allows a company in difficulty to negotiate with its creditors in a confidential manner, under the aegis of a conciliator appointed by the president of the commercial court.

Orpea had already carried out this year an amicable conciliation procedure which had enabled it to reach an agreement with its banks to ensure its financing.

But the group may no longer be able to comply due to various factors, such as inflation.

Management "failures" and inflation

The company also anticipates further asset write-downs, estimated at between 2.1 and 2.5 billion euros, according to a press release.

Present in 23 countries, the group swung into the red in the first half, posting a net loss of 269 million euros, due to the first impairment of assets.

However, it had achieved a half-yearly turnover of 2.3 billion euros, up 10.9%.

The second half is not looking very auspicious: "the downward trend in the financial performance of the activities" continues in particular "due to the significant increase in purchasing costs" of the group, in particular for foodstuffs, details Orpea in a press release.

Before that, Orpea's situation was "strongly affected by the malfeasance and ethical breaches of the previous management", declared Laurent Guillot.

The former corporate officer pointed out

The group has decided to complete the complaint against X already filed with the courts in April, this time explicitly targeting the former corporate officer, Yves Le Masne, said Laurent Guillot.

“I do not imagine for a moment that Yves le Masne (…) did not measure all the responsibility that was his,” he commented.

Orpea, which manages more than 350 establishments in France, has been in turmoil since the January release of the investigative book "Les Fossoyeurs", which accuses it of mistreatment of residents, accounting fraud and questionable resource practices. human.

Institutional abuse

Justice opened a preliminary investigation in April for institutional mistreatment and financial crimes, following a report by the government.

The group says it has taken the first steps to change its practices and plans to detail its three-year transformation plan on November 15.

Since the scandal, its title has also experienced a dizzying fall on the Paris Stock Exchange.

The action, whose course was suspended on Monday, was displayed at 14.74 euros on Friday at the close of the session, a drop of 83% since the beginning of the year.

Trading will resume on Wednesday when markets open.

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