Care home firm Orpea, under pressure over practices, gets new financing

PARIS (Reuters) – French care home company Orpea, under pressure over its business practices and how it runs its homes, said on Monday it had approved new financing that would result in a new drawdown for it of 250 million euros ($260 million).

“The agreement reached is therefore hugely beneficial to the ORPEA Group and to all its stakeholders, including in particular its 255,000 residents and patients, 71,676 employees and creditors,” added the company.

Orpea said this month that an audit had found evidence of financial wrongdoing but did not support all allegations against the company. Police also searched Orpea’s headquarters this month.

A 62-page report by auditors Grant Thornton and Alvarez & Marsal said Orpea had inflated labour expenses and made suspicious large payments to third parties, confirming some claims in “Les Fossoyeurs” (“The Gravediggers”), a book published this year.

Shares in Orpea and rival Korian have slumped this year since publication of the book. The author wrote that there had been severe lapses at an Orpea centre in a wealthy Paris suburb.

This sparked a nationwide debate on nursing conditions for the elderly.

Korian has also denied any widespread wrongdoing and has said it would always co-operate with authorities.

($1 = 0.9531 euros)

(Reporting by Sudip Kar-Gupta; Editing by Bradley Perrett)