PostedMay 13, 2022, 1:55 p.m.
The French group, which has nearly 50 homes in Switzerland, suffered from an abuse scandal. To face the “uncertainties”, he signed an “amicable conciliation procedure”.
The French group of private homes Orpea has been in turmoil since the release in January of a book-investigation, “Les Fossoyeurs”.
AFP
After the scandal, the financial consequences: the French group of private homes Orpea, in turmoil since the release, in January, of a book-investigation, signed an agreement with its banks to ensure its financing in an uncertain context, after a nearly 60% plunge in its annual net profit. This agreement is part of “an amicable conciliation procedure”, to prevent difficulties, opened before the Nanterre Commercial Court, the group said on Friday.
It “responds to the current context of uncertainty weighing on Orpea, as well as closed access to financial markets and the slowdown in the asset disposal program initially envisaged”, explained the group, present in 23 countries and which manages more than 350 establishments for dependent elderly people in France, plus around fifty in Switzerland.
It provides for the granting of a loan of 1.73 billion euros, the implementation of an asset disposal plan for more than three billion euros by the end of 2025 and an optional loan of a maximum amount of 1.5 billion euros. “I am committed to learning all the lessons from this crisis to restore the trust that our stakeholders have always placed in us, wherever the group is established”, commented Philippe Charrier, CEO of Orpea.
Profitability affected by rising inflation
For the current year, Orpea expects “to face exceptional charges related to the management of the crisis and its consequences”. It also expects its profitability to be affected by rising inflation, which impacts “energy costs and wages in some countries”.
The group says it is “confident in the growth dynamic” of its 2022 turnover, but has not published any numerical forecasts. It will not pay a dividend for the 2021 financial year. In the first quarter, turnover increased by 9%, to 1.12 billion euros.
Last year, its net profit fell by 59.3% compared to 2020, to 65.2 million euros, due in particular to a provision of 83 million euros “for risks and charges relating to risks estimated for the years 2017-2021, following the administrative investigations” to which the group was subject. And in 2020, its net profit had already shrunk by almost a third, because the health crisis reduced its activity and increased its operating expenses.
“Serious malfunctions”
The group has been under fire from critics since the publication, at the end of January, of Victor Castanet’s book-investigation, “Les Fossoyeurs”. The independent journalist denounced in particular the mistreatment of residents and the misuse of public funds. A report commissioned in the process by the French government pointed out, at the beginning of April, serious dysfunctions. The State filed a complaint and demanded the restitution of public grants allegedly diverted from their purpose.
Orpea, which announced last week the appointment of a new general manager, intends to carry out “a major transformation plan, primarily deployed in France”, intended to improve in particular “the quality of support and the well-being of the resident”, as well as its human resources policy.
(AFP)