very odd announcement from reu, page-9

Ok, the bad news is that the value of the nursing home has fallen 40% in value which now value it at GBP929,000 with debt of GBP1.2 billion

The good news is that the company plan to take on more debt to pay out 2 junior debt.. one of which is the GBP 52.2M loan from Rubicon Europe.

If this plan goes through, REU should have plenty of spare cash to play with.

You can view the article below.

http://www.zawya.com/printstory.cfm?storyid=ZW20081106000107&l=124129081106

Thursday, Nov 06, 2008

(Adds background on possible bid, debt restructuring)

LONDON (Dow Jones)--The value of U.K. care-home operator Four Seasons Health Care's property portfolio has fallen almost 40% to GBP929,000 over the past two years, the company said Thursday.

A valuation of the company's property portfolio, which includes its 400 U.K. nursing and care homes and 67 investment properties, was revalued after Four Season's failed to repay its GBP1.2 billion loan on 1 September.

In August 2006, the property was valued at GBP1.493 billion, which means the portfolio has fallen by more than GBP560,000 in two years.

A spokesman for Four Seasons said the valuation did not necessarily represent the underlying value of the business and added that the company continues to trade strongly.

He also said the valuation carried out in 2006 was not identical to the most recent valuation, as then the properties were valued on a portfolio basis rather than an individual basis.

The reduction in value of the property belonging to Four Seasons, which the Qatar Investment Authority bought in 2006 for GBP1.4 billion, will be of interest to the Priory Group and private equity firms Apax, Blackstone and Kohlberg Kravis Roberts, which are in talks to make a bid for Four Seasons.

Dow Jones Newswires reported Monday that the Priory, which operates over 50 psychiatric hospitals and care homes, has appointed UBS AG (UBS) as its adviser and is in discussions with the three private equity firms about a potential bid.

A person familiar with the matter said the Priory was looking to buy Four Seasons for around GBP800 million -less than the value of the property.

The Four Seasons spokesman said the valuation was not prepared as part of a sale process.

Four Seasons has been in protracted negotiations with its lenders to restructure its debt pile since it missed the payment in September.

Last Wednesday, the group, managed to extend a standstill agreement with its creditors until Jan. 22, 2009.

The standstill prevents the creditors foreclosing the business and sending it into administration.

A person familiar with the debt restructuring negotiations told Dow Jones Newswires that the talks center on a plan that would see the company's GBP600 million of bonds left in place, but would offer other debt holders a debt-for- equity swap.

The plan includes the two most junior debt tranches comprising payment-in-kind loans which are subordinated loans paid for with more debt.

-By Ainsley Thomson, Dow Jones Newswires; 44 20 7842 9318, [email protected]

(END) Dow Jones Newswires

06-11-08 1241GMT