Taylor Wimpey unable to raise cash

Published 02nd Jul 2008

Housebuilder Taylor Wimpey has failed to raise the extra capital it said it would seek just two days ago, citing tough market conditions, and it announced its finance director would leave the company.

The housebuilder had been expected to unveil a capital injection of about 500 million pounds from shareholders and other investors to help see it through the credit crunch and the housing market downturn.

Shares in Taylor Wimpey plunged 55 percent at the start of trading to 27 pence.

"The failure to raise fresh equity is a blow for both the group and the sector," Cazenove analysts said in a note.

"Trading conditions have deteriorated at an alarming rate, and we will be reviewing our profit and dividend estimates across the sector," they added.

The company said finance director Peter Johnson would stand down at the end of 2008 and it had begun to look for a replacement.

The biggest housebuilder by number of homes built does not expect a recovery in the housing market in the short term and does not expect any material recovery in the United States until at least 2009.

The company said housing reservations had declined sharply since its last update in April, with housing reservations down 45 percent year-on-year and both its order book and home completions down a third.

Source: ' reuters '

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