Retirement Care Australia has sold as a going concern six of its smaller aged care centres for $16 million.
RCA is 98% owned by Macquarie Capital Alliance Group and 2% by Tricare Limited.
RCA is also in advanced negotiations to sell one further centre on the same basis.
The seven centres to be sold operate 333 aged care beds and 22 ILUs and were part of a portfolio of 14 centres, 1,451 beds and 789 ILUs, which was acquired by RCA in July 2005. The centres are being acquired by five different aged care providers.
MCAG’s total cost of investment in that original acquisition was $50.5 million RCA also acquired a separate portfolio of 1010 aged care beds in December 2005, which is not involved in this sale process. Following the sale process, RCA will operate 2,128 beds and 767 ILUs at 19 centres around Australia.
Since the acquisition of the centres, RCA has delivered improvements in resident services, staff training and equipment across the portfolio. The purchasers of the seven sites being sold have agreed to honour existing resident agreements, offer staff the same positions as they hold today under the same terms and conditions and to recognise previous periods of service.
The centres sold by RAC yesterday are located in Tasmania – Tyler Village in Prospect Vale and Levenbank Aged Care Village in Ulverstone; in Victoria – Alton Court Aged Care Home in Altona; Gilgunya Aged Care Village in Coburg; and Kardinia Aged Care Village in Belmont, Geelong; in South Australia – Edenfield Aged Care Home in Parafield Gardens; and Northern Territory – Darwin Aged Care Home at Stuart Park.
The purchasers will assume liabilities relating to accommodation bonds, entry contributions and staff entitlements. The divested centres together did not contribute materially to RCA earnings. The sales are conditional on regulatory approvals and completion is expected across the sites by November 2006.
The sale proceeds will be retained within RCA as it finalises its building program for other centres in the portfolio.
By Adam Parsons
