Investors launch last-minute rescue after bank cuts credit to £65m-turnover housebuilder
Housebuilder Bewley Homes has been rescued from collapse by an eleventh-hour rescue deal with Jersey-based investors.
The £65m-turnover group, which is based in south-east England, is understood to have run into financial trouble after Royal Bank of Scotland (RBS) withdrew credit lines in September.
This week Bewley confirmed it had agreed a refinancing deal and documents filed at Companies House show that it was struck with Sector Trust, an offshore fund run by directors Kevin Costello and Stuart McInnes. The deal involved the transfer of 13 developments.
It is understood RBS has ended its association with the company although it declined to comment on the terms of the deal.
One source said: “Bewley was in real trouble. After RBS withdrew funding it needed to sort something out to avoid going into administration.”
According to documents at Companies House, Bewley owed the banks £47.7m on 30 June 2007. Its land and work-in-progress totalled £45.6m, which one financial source said was a high ratio of debt to stock. “Normally you want to have about 30% more stock than debt and I can only imagine it’s got worse since last summer,” he said.
As well as the refinancing package, Bewley was forced to make 20 redundancies as part of its restructuring. The cuts represent about one-fifth of the workforce based on June 2007 staff levels of 94.
A Bewley statement said: “Bewley Homes has completed a refinancing package with Jersey-based investors. With the demand for new dwellings drastically reduced, residential property developers have been faced with significantly less demand, resulting in stresses on facilities that were negotiated in a radically different economic environment.”
Bewley builds about 200 houses a year in Hampshire, Berkshire and Kent.
Bewley at a glance
Year ended 30 June 2007
Pre-tax profit £1.7m (2006: £2.7m)
Turnover £64.8m (2006: £70m)
Committed land spend £15m