Care homes company Orpea sinks as seeks debt talks, warns of impairments

By Sudip Kar-Gupta

PARIS (Reuters) -Orpea, hit by accusations of malpractice at its French retirement homes, said on Wednesday it expected more asset impairments and had requested conciliation talks with creditors, causing its shares to plummet.

Orpea anticipated asset impairments as of Dec. 31 of between 2.1 billion euros and 2.5 billion euros ($2.1 billion-$2.5 billion) before tax. The company also said it would present a new strategy plan on Nov. 15.

Orpea’s shares were down 34% in early session trading, dragging down the stock price of its care home rival Korian which also fell 4%.

In June, Orpea said an independent audit had found evidence of financial wrongdoing, including inflated labour expenses and suspiciously large payments to third parties, although it did not find support for all the accusations made in “Les Fossoyeurs” (the gravediggers), a book by independent journalist Victor Castanet published in January this year.

The problems with Orpea shocked many in France, given how many elderly people had to endure the first waves of the pandemic in 2020 with little access to the outside world.

Orpea CEO Laurent Guillot said in a statement on Wednesday he had “requested the opening of an amicable conciliation procedure benefiting the ORPEA SA legal entity”.

($1 = 1.0047 euros)

(Reporting by Sudip Kar-Gupta; Editing by Muralikumar Anantharaman, Krishna Chandra Eluri and Barbara Lewis)