opco-propco definition
opco-propco model means that investors are not directly exposed to care homes’ spiralling operational costs due to Covid-19, which have reached unsustainable levels. Personal Protective Equipment ("PPE") costs have risen twelve-fold and 10% staff absenteeism has led to high staff agency costs (agency workers are some 3x more expensive)xiv. This, combined with a c.22% decline in occupancy, means that care homes may struggle to service their debt obligationsxv. Industry leverage is high (average gearing of the largest 26 providers was 578% of assets in Q4-19) and so there is concern that some care home providers will default despite the Government’s £600 million Infection Control Fundxvi,xvii.