Bethanie strikes deal for Berrington aged care homes
Sean Smith and Nick Bruining
The West Australian
Friday, 6 December 2019 3:19PM
WA not-for-profit Bethanie is buying the failed Berrington group’s luxury aged-care homes in Subiaco and Como, guaranteeing nearly $100 million in accommodation deposits paid by more than 200 residents.
While the purchase meets the aged-care and retirement living provider’s aim to expand in its home market, Bethanie chief executive Chris How insisted the group had been also motivated by a desire to help the residents.
“We wanted to make sure that all the residents were going to be looked after and that their refundable deposits were going to be secured, and we’ve managed to achieve that,” he said.
The terms of the deal were not disclosed. But it is believed it involved only a small payment by Bethanie, reflecting that it is taking on $100 million in liabilities, largely related to the refundable accommodation deposits paid by residents on entering the homes. Many of the Berrington residents handed over more than $1 million each.
The facility sets the RAD amount with the approval of the Federal Government. The money is required to be returned to the resident or their estate, usually within 14 days of the resident leaving. However, in one case, the family of a resident who died in March is still waiting for the return of a $900,000 accommodation deposit.
RADs are not required to be kept in a separate trust account by the aged-care provider but effectively become a government guaranteed, interest-free loan that can be used by the provider.
Lead administrator Hayden White from KPMG said the RAD money should be returned to those affected early next year.
“The details of the (Bethanie) transaction are confidential but part of it may involve the triggering of the government guarantee scheme. The RADs for the existing residents will simply be rolled over to the new arrangements,” Mr White said.
The Berrington Como and Berrington Subiaco facilities form part of the Berrington group of companies which was put into the hands of KPMG’s insolvency experts in July.