Housebuilder hangs for-sale sign on contracting arm – despite speculation that it will raise no money
Taylor Wimpey has put its Taylor Woodrow construction arm up for sale after months of speculation that it would offload the division.
According to sources close to the process, sale documents went to the market last week in order to gauge the level of interest in the £609m-turnover firm.
However, they added that the housebuilder risked making no money from the deal owing to the way it was structured.
The business is estimated to be worth in the region of £150m but Taylor Wimpey would have to include an estimated £70m of cash that is sitting on the construction division’s books.
Any buyer may also be liable for some of the firms’ pension fund deficit, which some believe could be as high as £100m.
One source said: “The structure of the deal will be very complex but the upshot is that it’s not going to plug any of its £1.7bn debt.”
It may also struggle to find a buyer. One source said: “The most likely will be Europeans but I haven’t heard of anyone expressing any interest so far.”
Meanwhile, it has emerged that more jobs may be cut at housebuilder Crest Nicholson as part of refinancing talks with its banks.
It is understood that the £676m-turnover group is carrying out a cost-cutting review to persuade the banks to relax its lending covenants. It is due to report its findings in September. A source close to the talks said it was “a real possibility” that jobs would go.
To date, Crest Nicholson, which was taken private in March 2007 as part of a £715m deal led by HBOS and Scottish entrepreneur Sir Tom Hunter, has made 10% of its staff redundant, well below the 40-50% level at other volume housebuilders.
For more on the housebuilding industry, see www.building.co.uk/housing