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Shares in French care home group Orpea tumbled 34% on Wednesday as it resumed trading two days after a suspension on the Paris Stock Exchange.
France’s market watchdog AMF stopped trade in the company’s shares and bonds on Monday over allegations of Orpea’s
ORP,
malpractice of older residents in its retirement homes.
Shares tanked on Wednesday after reports emerged that Orpea was enlisting in talks with creditors and said it expects more asset impairments, between €2.1 billion and €2.5 billion ($2.1 billion-$2.5 billion) before tax, according to Reuters.
Orpea’s stock is down 88% so far this year.
New Chief Executive Laurent Guillot also announced that the company will present a new strategy on Nov. 15.
“In order to ensure the implementation of the transformation plan that I will present on November 15, in a challenging macroeconomic context that has impacted operating performance as well as the asset disposal program, and in view of the risk of depreciation on certain assets, I have requested the opening of an amicable conciliation procedure benefiting the ORPEA SA legal entity,” he said.
In June, the firm told the markets that an independent audit found evidence of financial mismanagement.
The 62-page report found that Orpea had exaggerated its labor expenses and made irregular large payments to third parties.
“The processes in the care homes and at the headquarters are unreliable, subject to numerous manual interventions and there is no satisfactory internal control system”, the audit report said.
“Although the report demonstrates that some of these allegations cannot be substantiated, it also confirms failures and misconduct for which, once again, we would like to offer our most sincere apologies”, Philipp Charrier, former Orpea chief executive, said at the time.
