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Taylor Wimpey has been given an extra three months to reduce its debt after successfully renegotiating its banking covenants.
The developer is struggling under its £1.9bn debt pile and a stalled housing market.
In a stock announcement on Christmas Eve, Taylor Wimpey confirmed it had reached an agreement with its debt providers to defer the testing date of its banking covenants until 31 March 2009.
The housebuilder said it is in “full compliance with all its existing covenants” but would have breached its covenants in January under the original deadline.
In the announcement, the housebuilder stated: “We remain confident that a robust, stable, medium-term financing solution for the group, which takes into account the requirements of all relevant stakeholders, will be achieved prior to the end of this deferral period.”
Shares in Taylor Wimpey have dropped by around 90% in the past year. In November, Credit Suisse reduced its target price for the housebuilder’s shares from 70p to 10p.
The company, formed from the £5bn merger between Taylor Woodrow and George Wimpey last year, has already cut almost 2,000
The housebuilder will next update in a trading statement on January 13.
