Sources close to retirement housebuilder McCarthy & Stone have dismissed reports it will need new shareholder cash as part of an 拢800m refinancing deal.
The news follows media reports at the weekend that it was likely HBOS and Reuben Brothers would pump new money into the company to secure a relaxation of its lending agreements.
A source close to the talks between the 拢458m-turnover group and its lenders expressed surprise at the reports. He said: "It鈥檚 news to me because the company hasn鈥檛 been working on that basis, as far as I鈥檓 aware. If it was true, it would obviously make refinancing a lot easier.鈥�
A source close to the company said the deal did not need a cash injection. He said: 鈥淭he company is not looking for cash and I鈥檓 pretty certain there鈥檒l be no new cash going in. The deal being discussed is purely about managing interest payments on its 拢800m of debt.鈥�
He said a deal would probably be announced in a month to six weeks鈥� time, adding: 鈥淭here is no reason to believe there will be any issues. The company is comfortable that a solution can be reached.鈥�
McCarthy & Stone appointed bank Rothschild in June to help restructure its debt and prevent it from breaching banking agreements amid the downturn.
In July, Barratt struck a deal with its bank to relax its covenants, which was not based on new cash. Taylor Wimpey looks likely to do the same.
We need to take painful measures now to ensure the company remains in good shape
Howard Phillips
Meanwhile, McCarthy & Stone has cut 200 more jobs. The news follows an announcement by the company in May that it would cut 120 jobs, and means it has lost over a quarter of its 1,200 workers since January.
The jobs will be cut across all departments, at its offices in Byfleet, Coventry, Potters Bar, York, Glasgow and Bournemouth.
Howard Phillips, chief executive of the company, said: 鈥淭here is no escaping the Bank of England鈥檚 predictions for the coming year. We need to take these painful measures now to ensure the company remains in good shape to resume expansion as soon as the economy allows.鈥�
The company declined to comment on the talks with its banks.
Who鈥檚 got the banks on board?
Barratt
Deal agreed on 10 July
Taylor Wimpey
Expected 鈥渋n weeks鈥�
Redrow
No breach yet, but talks continue with banks
Crest Nicholson
Agreed in principle
McCarthy & Stone
Likely, but talks are at an early stage
Postscript
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