Taylor Wimpey rescue deal set to survive market unrest

摘要

Taylor Wimpey's rescue deal is on track despite the turmoil in the financial markets, sources close to the talks between the housebuilder and its banks have confirmed. The company is carrying out due diligence on a deal that would see its lenders relax banking covenants that are likely to be breached in January 2009. A deal is needed because of the housebuilder's plunging profits and high debt (see box). A source said the wider economic unrest had slowed the process but should not affect the outcome. He said: "The situation in the credit markets may delay things, but a solution will be ground out. Taylor Wimpey knows it will muddle through; it's just waiting for the market to improve." Furthermore, it is understood that there is a reluctance among the banks to let Taylor Wimpey go under. The source said: "The company's high debt means banks are already heavily involved and can't pull back credit lines. If the company went under it would leave the banks with a load of assets they would have to dispose of. Hence, they have to support the company."