Lenders to McCarthy & Stone, the retirement-home builder, may have to write off nearly half of the company’s debt if third-party investors are not found to put up new money.

At a meeting of lenders last Friday, advisers to the company – in which HBOS is a leading shareholder and creditor – said they estimated that McCarthy & Stone could only support up to about £350m of cash interest-bearing debt, compared with a present burden of about £650m.

The company has some £900m of debt in total, which also includes debt on which interest is paid in kind. But talks on a restructuring plan are still continuing, with some parties convinced the company could sustain more debt.

NM Rothschild has launched a marketing process to attract third-party investment, to reduce the amount of debt lenders would have to swap for equity stakes. Information memoranda were sent out last week to prospective interested parties, according to a person familiar with the situation.

First-round offers are due by the end of November.

Financial Times