(Bloomberg) -- Orpea SA, the embattled retirement-home operator at the heart of a scandal in France, secured 1.73 billion euros ($1.8 billion) of financing from banks as the company faces increasing costs and debt maturities.

The company aims to sell 3 billion euros of assets by the end of 2025 to reduce debt, Orpea said in a statement Friday. It won’t pay a dividend this year because of the expenses it faces to overhaul its operations in the wake of the scandal, in which it was accused of stinting on care for the elderly to boost profits. The stock slumped as much as 6%.

The financing agreement, with banks including BNP Paribas SA, Credit Agricole SAand Societe Generale SA, includes a commitment to maintain at least 300 million euros of cash on hand. The syndicated facility is a response to “the current period of uncertainty for Orpea,” access to financial markets that’s been closed off and a slowdown in the originally planned asset disposal program, it said.

Orpea has “major financing challenges” due to investments amounting to about 900 million euros a year for the development of its real-estate portfolio in 2022 and 2023, the company said, and it has 850 million euros of debt maturing in the second half of this year and 983 million euros in 2023.

French prosecutors last month expanded an investigation into the beleaguered retirement-home operator. The probe opened in February for alleged falsification of records and violation of labor rules through the abusive use of short-term contracts has been widened following referral by the French government, according to Nanterre prosecutors. 

The company was thrust into the spotlight at end of January, when a book called “The Gravediggers” singled out its top managers for putting profits ahead of patient welfare, rationing items like food and adult diapers. Orpea shares have since lost 61% of their value, and a string of government representatives -- including President Emmanuel Macron -- expressed shock and disgust over the revelations. 

France to Bolster Nursing-Home Oversight After Orpea Scandal

A review into the allegations commissioned by Orpea pointed to chronic under-staffing and mishandling of public funds. 

Orpea also said Friday that net income slumped 59% last year to 65.2 million euros, with debt standing at 7.89 billion euros as of Dec. 31, up by 1.23 billion euros versus the previous year due to a “sustained” property development and acquisition strategy. First-quarter sales climbed 9% overall, and that’s in line with expectations, according to Jefferies International Ltd. analyst James Vane-Tempest.

Orpea said it expects operating profitability will be hurt this year by inflation, notably higher energy costs and salaries in certain countries. It’s also bracing for expenses related to the management of the scandal and its consequences. 

The company plans a “major” overhaul, primarily in France, focused on the quality of care and well-being of residents, the strengthening of dialog with stakeholders, an improved human resources policy, stronger internal controls and promotion of its whistle-blowing policy for employees, it said.

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