Gloom piles up for Taylor Wimpey
Monday, November 10, 2008
Taylor Wimpey, the crisis-hit housebuilder, will issue a grim trading statement this week, revealing an alarming drop in sales at a time when it needs all the cash it can muster to survive.
The firm, struggling under the weight of a £2bn debt mountain, will say that increased incentives to persuade buyers to commit to one of its homes have significantly reduced margins at a time when sale volumes have plunged.
Sales and house prices have weakened further since the company, led by chief executive Peter Redfearn, last gave the City an update in August.
Taylor Wimpey was worth £4.3bn midway through last year but it is now valued at just £142m. The firm is willing to sell off large chunks of its land bank as it struggles to meet its onerous bank obligations.
Taylor Wimpey's statement comes as analysts at Panmure Gordon expect write-downs at the firm to total £1.2bn, with £690m already accounted for. The company is expected to say that it has failed to reach agreement on a refinancing with banks and bondholders, which are now involved in talks to ensure the firm keeps on trading. Lenders are considering basic terms for restructuring the company's finances that would give it breathing space to trade through the crisis until 2012.
Article continues at Guardian online
The firm, struggling under the weight of a £2bn debt mountain, will say that increased incentives to persuade buyers to commit to one of its homes have significantly reduced margins at a time when sale volumes have plunged.
Sales and house prices have weakened further since the company, led by chief executive Peter Redfearn, last gave the City an update in August.
Taylor Wimpey was worth £4.3bn midway through last year but it is now valued at just £142m. The firm is willing to sell off large chunks of its land bank as it struggles to meet its onerous bank obligations.
Taylor Wimpey's statement comes as analysts at Panmure Gordon expect write-downs at the firm to total £1.2bn, with £690m already accounted for. The company is expected to say that it has failed to reach agreement on a refinancing with banks and bondholders, which are now involved in talks to ensure the firm keeps on trading. Lenders are considering basic terms for restructuring the company's finances that would give it breathing space to trade through the crisis until 2012.
Article continues at Guardian online
Labels: credit crunch, Housebuilders, Taylor Wimpey
