Taylor Wimpey agrees new terms with its bankers
After lengthy negotiations with their bankers, Taylor Wimpey has agreed on the terms regarding their £1.57 billion debt. On two previous occasions the company was required to ask its lenders to delay covenant tests as the negotiations took far longer than originally estimated.
The new deal means that it will no longer need to ask its shareholders for more money through a rights issue. Their share prices rose to 39.25p, an increase of 7 per cent. Taylor Wimpey will now have proposed facilities of £2.47 billion, against net debt of £1.57 billion. The company has had £235 million of undrawn and excess facilities withdrawn. The cost to the company for the lawyers and bankers work on the agreement has reached £60 million.
Taylor Wimpey made a £2 billion loss in 2008 due in part to write downs in the value of its property portfolio. It has closed 16 regional offices in total since the beginning of 2008. The chief executive of Taylor Wimpey, Pete Redfern, said “although we remain cautious about market conditions, current trading and the cash generation of the business are both encouraging, but we remain concerned about the sustainability of current conditions, due to uncertainty over mortgage availability and general economic conditions”.
| 
