Taylor Wimpey is set to yield to pressure from its lenders to offer them some equity as part of a package to refinance its £1.9bn net debt pile.

The housebuilder’s banks and other lenders are set to own a single-digit stake in the business, and to charge much higher interest rates in exchange for waiving current conditions surrounding the debt, according to people familiar with the situation.

The ailing developer has caved in to its banks’ demands to own part of the company in spite of its management publicly opposing such a move a fortnight ago.

Shares in the ailing builder have fallen by a further 60 % since then, including a 37% slide yesterday, to 4.4p.

The equity aspect will sweeten the deal for lenders, which have so far not committed to waiving Taylor Wimpey’s debt covenants in spite of a testing date less than six weeks from now. A waiver of covenants tests is expected to be signed well before then, allowing talks to continue. The company declined to comment.

Financial Times