Nestor Healthcare is in a race against time to find a buyer for one of its community care and out-of-hours GP businesses.

Nestor, which is awaiting the outcome of a series of tenders relating to the shake-up of NHS doctors' services, is under pressure from its banks over £60 million in borrowings. If the private sector healthcare provider fails to raise cash from a sale, it may breach its banking convenants by December.

Presenting a bleak set of first-half results yesterday, Nestor said that discussions with potential buyers - believed to include its rivals Assura and Allied Healthcare - continued and that it hoped to make an announcement within weeks.

A private equity investor who has examined Nestor said that the company may find it difficult to secure a buyer because most of its operations involve the supply of carers to private homes - a business model that is notoriously difficult to manage. She said: “There's no bricks and mortar, which is the attraction of care homes to private equity groups.”

Sebastien Jantet, an Investec analyst, said: “Nestor's banking covenants may come under pressure in December unless it is able to pay down a material amount of debt or renegotiate its facility.”

Nestor's first half was hampered by the loss of two key contracts for its GP businesses PrimeCare and Cornelle. The company is not paying an interim dividend, which was 0.5p in 2007's first half, after net profits fell to £2.5 million, from £3.9 million a year ago.

The poor result was worsened by the departure in April of Stephen Booty, the chief executive, whose severance package cost Nestor £851,000.

First-half revenues dropped to £84.5 million, from £89.7 million, as Nestor's primary care division struggled and the number of hours worked by the company's nursing and homecare businesses, Goldsborough and Medico, fell.

The company blamed the decline on a tightening of local authority budgets and the cancellation of domestic care packages.

John Rennocks, Nestor's chairman, who has been running the company since Mr Booty's departure, said that it would take another six months to determine the prospects of the primary care businesss once the NHS tenders were awarded.

He hoped that Nestor would be central to the overhaul of local healthcare centres intended to treat more patients outside the overstretched hospital system.

The year-long NHS review completed by Lord Darzi of Denham last October set in motion plans for 150 new GP-run health centres, which Nestor wants to supply with medical staff.

Commenting on Nestor's debt of £60 million, Mr Rennocks said: “The company is negotiating with its debt providers about suitable facilities. The directors anticipate making a further announcement in September.”

Mr Rennocks said that discussions about selling part of the business would continue in the coming weeks, but added: “There can be no guarantee that agreement will be reached.”

Nestor's shares closed down 2p, or nearly 8 per cent, at 33p. A year ago the stock was trading above 125p.

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