Taylor Wimpey jumps on bank debt agreement

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The Independent Online

Taylor Wimpey is understood to have reached agreement with a group of key eurobond holders this week that should help it to restructure its debt pile of £1.55bn after long-running talks. The house builder declined to comment yesterday but its shares soared by 5.5p, or 23.4 per cent, to 29p.

As part of the restructuring, debt holders are expected to receive warrants to subscribe to 5 per cent of Taylor Wimpey's equity. The agreement will also pave the way for it to raise about £300m in additional capital. Taylor Wimpey completed the restructuring with its banks ahead of a deferred covenant test that expired at the end of March. Its debt mountain resulted largely from the company's acquisition of George Wimpey in 2007.

On 4 March, Taylor Wimpey said: "We remain in discussions with our debt providers, including the providers of our bank facilities, our private placement noteholders, and bondholder committees representing approximately 70 per cent of the principal amount of each of the 2012 and 2019 eurobonds."

At that time, it said that discussions were at an advanced stage and continued on a constructive basis with all debt providers being supportive of the company. Taylor Wimpey's shares have tumbled by 88 per cent over the past year, as it battles concerns over its debt and a tumbling housing market.