Speculation Japara will sell and lease back aged care homes as providers look to raise cash: The Australian

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The newspaper’s Dataroom section is reporting sources close to the Melbourne-based listed operator say the group is looking to reduce its debt by selling and leasing back some of its homes.

As of 30 April 2020, Japara’s net debt was $201 million with available liquidity in cash and undrawn debt of $144 million and a current market value of $127 million.

The column also says both Japara and Regis – which had debt of $281.5 million in December and has a current market value of $433 million – could be looking at equity raising in the coming weeks as they look to increase cash reserves in the wake of COVID-19.

Aged care has attracted interest from private equity in the past – think Quadrant with Estia and later home care as just one example – but the expectation is investors will wait for the results of the Royal Commission’s Final Report in November before making their move.

The Australian says one name in the mix is former UBS investment banker David di Pilla (pictured), the Managing Director of Home Consortium, which has 30 retail centres across five states incorporating brands including Woolworths, Coles, Chemist Warehouse, Spotlight and Anaconda.

Mr Di Pilla is also a director for Aurrum Aged Care, which has nine homes in NSW and Victoria with over 1,000 beds.

It is understood Home Consortium or other interests backed by Mr Di Pilla had a small stake in Japara before divesting the shares – increasing the chance he could be involved in any industry purchase.