Taylor Wimpey and banks agree rescue deal
Tuesday, 26th August 2008

Taylor Wimpey and banks agree rescue deal

Property developer Taylor Wimpey has agreed a deal with banks to relax its lending covenants after an improvement in housebuilder share prices, it has been revealed.

Construction news website Building reported on the development which will allow the company to avoid the need for fresh equity.

It added that Taylor Wimpey is currently in debt worth £1.7 billion, which was widely expected to "breach loan to value covenants in February".

Building also said that discussions between the construction firm and four private equity groups have been put on hold, after proposed talks would have shared out 30 per cent of the company's assets.

A source revealed to the news provider: "Interest cover covenants will be turned into cashflow covenants in similar fashion to Barratt.

"The fact Persimmon called the bottom of the market on Thursday was also significant."

This is Money also revealed that Taylor Wimpey was expected to write down the value of its British land by up to £550 million due to further pressures of the current economic climate.