McCarthy: 'Let us expand'
Bournemouth-based retirement housebuilder McCarthy & Stone is in talks with its banks to relax its strict lending terms in order to expand the business.
McCarthy & Stone went through a major financial restructuring in 2008-09 after the credit crunch badly hit its ability to cope with a £900m debt mountain. Although a hugely successful company that dominates its niche market, McCarthy & Stone took on this huge debt when it was taken private in 2006 for £1.1bn.
The consortium that bought out the business, led by Scottish philanthropist Sir Tom Hunter, took heavy writedowns and about 60 banks effectively took control.
Under the terms of the restructuring, McCarthy & Stone could only spend a proportion of the cash it made after interest payments on new land and developments. However, the group has quite a lot of cash in hand after a successful few years and is asking the banks whether the terms can be changed so that it can spend more of this to grow the business.
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