Southern cross in more trouble as its chief quits

Southern Cross Healthcare, the UK's biggest care homes group, lurched deeper into crisis today when its chairman quit, saying his experience "building businesses and improving their performance" was beyond the firm's needs as it struggles to survive.

Southern Cross, which looks after more than 31,000 elderly people in the UK, last month admitted it cannot afford its landlords' rent demands after state funding was slashed.

Today, in the latest part of its restructuring, it replaced chairman Ray Miles with Christopher Fisher, former managing director of investment bank Lazard, who is already on Southern Cross's board. Miles said: "Given that my own experience has mainly been building businesses and improving their operational performance, and that the company now faces a period of intense financial restructuring, it is time to hand over to others with more experience of this."

Southern Cross walked away from takeover talks last month, when it said it needed to focus on its "unsustainable" rent bill.

It today said it was finalising its plans to restructure rent payments before approaching landlords. "While there can be no certainty as to the success of these negotiations, the prevailing mood appears constructive," it said.

The group also said talk about its survival had hit profits.