The Royal Bank of Scotland acquired The Priory, the rehabilitation chain well known for treating troubled celebrities, when it took over ABN Amro. The company now has debts topping £800m and its equity is worthless.
The same bank is also lead lender to Four Seasons, the older people care home giant. Not only is it exposed to the debt, it owns about £100m of “piks” (payments in kind), which has no value.
So what do you do in such circumstances? How about combining the two and ending up with an even larger problem. Surely, nobody would be suggesting you do that would they? Yep, that is just what is happening. Dick Stroud
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