Refinancing deal drives housebuilder to close three offices in massive restructure

Crest Nicholson is to shed one-fifth of its jobs and close down half its offices in the wake of a refinancing deal that will leave it almost entirely in the hands of its creditors.

Stephen Stone, its chief executive, said the latest cuts would bring the reduction in staff levels since the start of 2008 to 40%, from 650 to fewer than 400. He would not confirm the number likely to go in the latest round, but it is understood to be about 100 people.

A letter from Stone to staff, seen by Building, said three offices at Tamworth, Hemel Hempstead and Westerham would close, leaving just the Chertsey, Brentwood and Bristol offices.

In addition, Crest Nicholson Regeneration is to be merged with the Crest Strategic projects business “and scaled down”. The new business is likely to be called Crest Nicholson Communities.

Stone said the redundancies were “sad” but an inevitable response to the economic outlook. “We’re selling at half the rate we previously were. You have to be realistic and accept the implications of the lack of mortgage availability.”

The cuts are the third wave of redundancies at the firm since the start of the credit crunch.

Stone said the company, which built 3,300 homes in England and Wales in 2007, would retain its geographic coverage.

Stone refused to comment on weekend reports that the firm had been taken over by its lenders. However, it is understood a deal has been reached whereby the firm will be owned 90% by a consortium of creditors including HBOS, HSBC and Lloyds TSB.

The deal allows the firm to halve its £1bn debt mountain and will see current owner Castle Bidco, a consortium backed by HBOS and entrepreneur Sir Tom Hunter, squeezed out.