The future of Oakdene Homes has been called into question after it became the first listed housebuilder to breach its banking covenants this week.

The news followed the firm’s £6.4m loss in the first six months of 2008 and the admission that the company had failed to raise £5m from a share placement.

Auditor UHY Hacker Young said: “This [covenant breach] indicates the existence of a material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern.”

On 30 June 2008, Oakdene had net debt of about £85m and is currently relying on a temporary deal with its lenders.

Turnover was down 41% from £18.9m to £11m and its pre-tax loss was £7m following and writedowns of £7m.

Until we’ve got through the next two or three weeks, it will be very difficult to tell what’s going to happen

Andrew Storey, Lend Lease

The housebuilder said it failed to place just over a million of the 10 million shares it had planned to and said it was seeking legal advice about its position.

It is presumed that one or more investors had declined the opportunity in view of the fact that they were being offered at 50p whereas their value had dropped to 17p in recent weeks.

Following news of the covenant breach, Oakdene’s share price dropped to 7p.