Orpea, a group of private nursing homes, announced on Wednesday that it has opened a new amicable conciliation procedure before the Nanterre commercial court to renegotiate its debt with its creditors. This announcement comes amid the turmoil that has ensued since the publication of a book investigation in January.
According to the newly appointed general manager of the company, Laurent Guillot, who spoke with AFP, “The company is too leveraged due to the worldwide and real estate development carried out at a furious pace, on the initiative of the prior general management.” “This amicable conciliation procedure allows us to renegotiate with the financial actors the status of our debt and at the same time to protect our employees and residents,” he went on to say after the previous statement.
According to Laurent Guillot, “the idea would be to convert a portion of Orpea's debt into equity and then raise money from investors in the form of debt and equity once more.” Orpea had already gone through an amiable conciliation procedure this year, which allowed it to arrange with its banks to assure that it would have sufficient funding. However, there are several issues, such as inflation, that may make it impossible for the company to continue to comply with it. A press release stated that Orpea anticipates additional asset write-downs, with estimates ranging between 2.1 and 2.5 billion euros.
According to Laurent Guillot, “the situation at Orpea has also been profoundly damaged by the ethical failures and financial mismanagement committed by the former management.” According to Laurent Guillot, the group has decided to finish the case against X that has already been filed with the courts. This time, the group intends to target Yves Le Maine, who served as a corporate officer in the past. “I do not imagine for one second that Yves le Maine (…) did not weigh all of the obligations that was his,” the speaker went on to say at the end.
Since the publication in January of the book investigation titled “The Gravediggers,” which accuses him of mistreating residents, accounting fraud, and questionable human resources practices, Orpea has been in turmoil. Orpea is present in 23 countries and manages more than 350 establishments in France alone. In April, in response to a referral from the government, the Department of Justice initiated a preliminary inquiry into allegations of criminal activity and abuse within an institution. According to the organization, it has already made the initial moves toward altering its procedures, and on November 15, it will reveal the specifics of its plan to undergo a transition that will take place over the next three years. Since the incident broke, the title's value on the Paris Stock Exchange has undergone a precipitous decline. The transaction, which was halted on Monday, was last seen trading for 14.74 euros at the end of the session on Friday. This represents an 83% decrease from the beginning of the year's trading session. The markets will reopen on Wednesday, at which time trading will resume.