黑洞社区

City analysts have raised the possibility of housebuilder Barratt Homes being taken into administration after it lost half its value in the first three days of the week. As 黑洞社区 went to press, Barratt had a market capitalisation of 拢213m, down from 拢488m on Monday. It has an outstanding debt of 拢1.7bn.

Barratt鈥檚 slide came as shares in all quoted housebuilders slumped after more negative news about the housing market. Taylor Wimpey lost a third of its value.

Barratt is seen as vulnerable because of the debt it took on to fund its 拢2.2bn purchase of Wilson Bowden last year.

Richard Kelly, partner at accountant BDO Stoy Hayward, said: 鈥淚t鈥檚 potentially going to be very difficult for a number of housebuilders to get through the next few months [as a going concern]. Those who don鈥檛 have massive debt burdens will be best placed to struggle on.鈥�

Another City source, who declined to be named, said: 鈥淲hen the share price falls this far, the market is saying it expects the company to go bust.鈥�

The fall in Barratt鈥檚 share price came on the back of a negative note from Dresdner Kleinwort telling investors not to buy shares in the firm at any price.

The note, from analyst Alistair Stewart, said the firm faced a 拢1bn black hole in its finances, and it was not clear how debt would be paid. It said: 鈥淣obody should consider buying until details of writedowns, gearing and any financial restructuring become clear.鈥�

Analysts said it would now be difficult for the firm to raise money through a rights issue, and that a debt-for-equity swap was more likely. This would mean banks agreed to swap the debt for a stake in the company.

An insolvency specialist said Barratt was unlikely to go into administration. 鈥淚 think we鈥檙e a long way from Barratt going to the wall as long as it services its debt. The banks won鈥檛 want to pull the plug because they鈥檒l get so little from it.鈥�

A spokesperson for Phoenix Asset Management, which owns 7.4% of Barratt, said: 鈥淣one of its debt falls due in the near future, but if they want to repay debt they just have to run the business for cash.

鈥淲e fully support the management who are in our view running Barratt in the long-term interests of shareholders.鈥�

Barratt is the only major housebuilder not to announce redundancies over the past three months.

On Wednesday Barratt was forced to calm investors鈥� nerves with a statement to the stock exchange that said it was operating within its 拢2.6bn debt facilities and was on course to hit a pre-tax profit of 拢395m.