Rights issue flop knocks housebuilder
The future of housebuilder Taylor Wimpey was in doubt yesterday as the beleaguered group failed to raise £500m of capital from investors, causing the value of the company to halve.
Britain’s largest builder issued an intensely gloomy statement, saying it was slashing 900 jobs, it was not buying any more land, and admitted it was renegotiating its banking agreements over fears they might be breached.
The news comes amid turmoil in the housebuilding sector over the last few weeks, with speculation that rival Barratt was preparing a massive rights issue and shares in the sector plunging
“Trading updates don’t come much worse than this – and that’s even after flagged pain on Monday. The really bad news is that the attempted re financing with existing shareholders has failed,” Kaupthing Singer & Friedlander said in a note yesterday.
On Monday Taylor Wimpey, which was formed last year through a £5bn merger between George Wimpey and Taylor Woodrow, said it was talking to shareholders about an equity raising.
Sources close to the firm denied yesterday the failure to secure the £500m extra funding was a failure. The firm said it did not expect the housing market to recover soon.
