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Cala calls in Rothschild

Bank held housebuilder Cala Group has called in Rothschild to put together a business plan to pave the way for debt reduction and a possible sale, according to reports in the Financial Times.

The paper speculates the move could herald a directional shift by dozens of housebuilders whose majority shareholders are banks.

A debt-for-equity swap last year left the Edinburgh property developer primarily owned by Lloyds.

A person familiar with the discussions told the paper:  “It wouldn’t be much of a surprise if other housebuilders in the banks’ portfolio are looking forward and saying ‘we could get back into this market in the not-to-distant future’.”

Cala, which reported a better than expected pre-tax loss of £18.6m for the year to June 2010, confirmed that it had appointed Rothschild to review its business plan.

Cala’s finance director Graham Reid said: “It is an appropriate time to carry out such an exercise following a period of solid trading since the successful financial restructuring of the company.”

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