Talks to secure robust financing structure for housebuilder likely to go on into next year
Beleagured housebuilder Taylor Wimpey is unlikely to strike a revised deal with its banks before next year, the firm said today.
In a statement to the stock exchange, Taylor Wimpey said that it is likely a revised covenant structure - governing the company's permissible level of debt - will be “concluded early next year”. Previously, the firm had said a deal should be reached by the end of 2008.
The firm said the reason for the delay was that it was extending its current discussions with its banks to include applicable eurobond holders in order to increase the likelihood of achieving a robust financing structure.
The company said: “The recent unprecedented events in world financial markets have reinforced the board's cautious view of the short-term outlook for UK housing. In the current environment, securing a comprehensive financing structure that is robust under all reasonable downside scenarios is essential.”
Taylor Wimpey said that discussions with its banks were continuing “on a constructive basis” and that the banks had “indicated that it is their intention to agree to replace the current covenants with a revised set of covenants which are more appropriate to the current market environment”.