The group’s finances had gone into the red after the publication of a book-investigation revealing cases of abuse in its establishments.
Commercial justice gave, Monday, July 24, the green light to the safeguard plan of the giant of the retirement homes Orpea. From November, the group should be able to erase part of its debt and come under the control of a group of shareholders led by the 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.
In detail, Orpea will have to wait for the Paris Court of Appeal to validate 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). This decision must be made “No later than November 13”.
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.
Difficult return after a scandal
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 (Fayard) in January 2022. Journalist Victor Castanet revealed the financial embezzlement of the former management and the mistreatment of residents and employees.
On June 29, two former leaders of the group were placed in pre-trial detention after the opening of a judicial investigation for “breach of trust, fraud, abuse of corporate assets, organized money laundering and corruption”. Orpea is also the target of several preliminary investigations, including an investigation for “institutional mistreatment” and “financial offences”. The group is also the subject of an investigation for “forgery and use of forgery and violation of labor legislation by abusively resorting to fixed-term contracts”.
“The company’s reputation has been tarnished, clearly”provoking “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.