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Taylor Wimpey debt negotiations end on back of £1.97bn loss

Taylor Wimpey today revealed a £1.97 billion loss for 2008 as it confirmed it had agreed a new debt facility bringing an end to its long running renegotiations.

The house builder has been in talks with its banks over its debt facilities for nearly a year.

And today the firm said it had agreed total facilities of £2.47 billion until July 2012, with its net debt currently standing at £1.57 billion.

The new facility which is subject to approval will see a steady reduction in the debt facilities of £150 million by 30 June 2009 and a further £350 million by 30 June 2010.

New committed UK overdrafts of £45 million will replace the present uncommitted facilities of £95 million.

The new agreement will cost Taylor Wimpey with amendments to the margins equivalent to an increase of 4.55 per cent a year.

The house builder’s unaudited results which will be officially released at the end of the month show a pre-tax loss of £74.7 million with writedowns of £1.9 billion taking the total 2008 loss to £1.97 billion.

Revenue fell to £3.46 billion from £4.1 billion in 2007.

But like its housebuilding peers Taylor Wimpey reported a steadying of the market in the first 13 weeks of 2009 with market performing at the “upper end of expectations”.

Net sales for the three months of 2009 are 78 per cent up on the second half of 2008.

Bosses said prices had held firm so far in 2009 indicating early signs of the potential bottom in the slump for new build properties.

Taylor Wimpey chief executive Pete Redfern said: “Following complex negotiations, this financing package will allow management to run the business for the benefit of all stakeholders and gives the group flexibility to enable it to trade through the current downturn.

“Although we remain cautious about market conditions, current trading and the cash generation of the business are both encouraging.”