Crest Nicholson’s lenders have reached a debt-for equity swap agreement with the housebuilder reducing its debt by £630m for a 90% stake in the company.
The privately-owned company, headed by chief executive Stephen Stone, said it had ‘overwhelming support’ from its lenders for the deal.
As part of a wide-ranging financial restructuring of the business the lenders have also agreed a new £40m working capital facility and restructured the terms of the remaining debt, which before the swap was agreed had reached £1.15bn, through to the end of March 2012.
The restructuring will be achieved through a ‘scheme of arrangement’ which involves the creation of a new holding company, Crest Nicholson Holdings Ltd to acquire Castle Bidco, the vehicle used by HBOS and Sir Tom Hunter’s West Coast Capital to take Crest Nicholson private in May 2007.
Crest Nicholson Holdings will be 90% owned by the lending banks and 10% by management.
Stone said that none of the group's trading companies will be subject to such a process but, with a three year financing agreement in place, ‘will derive benefit from a significantly reduced group debt burden and a new working capital facility’.
Stephen Stone, chief executive at Crest Nicholson, said: ‘The scheme of arrangement is now under way and I can confirm that the discussions with our stakeholders have resulted in their overwhelming support for the financial restructuring of the Group.
‘I am confident that the process, which requires Court approval, will be complete by the end of March. This will ensure that the business is better placed to deal with the current sector slowdown and will enable us to make the most of future opportunities in a difficult market.’