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Taylor Wimpey may carry out a rights issue to shore up its balance sheet, according to sources close to the debt talks between the housebuilder and its lenders.

The move would help generate about 拢300m of capital, which is understood to be the figure lenders have encouraged the company to raise.

They said: 鈥淭he refinancing deal is not contingent on them raising the money but it would help with their covenant position. It鈥檚 just encouragement but not in nasty sense.鈥�

It is understood a clause in the deal on its 拢1.55bn debt pile means interest repayments would rise in 2010 unless fresh cash is raised.

Other options on the table are understood to include the sale of assets and the generation of internal cashflow.

The source added: 鈥淚n the time frame they鈥檝e got it鈥檚 doable.鈥�

Cenkos analyst Kevin Cammack said: 鈥淚t looks like fresh equity is the only real option. They haven鈥檛 got anything like Taylor Woodrow Construction left to sell and selling land would reduce the company to a shadow of its former self. New equity is a double whammy because it reduces net debt and increases the equity base.鈥�

Meanwhile an injection of private equity cash looks to be a remote option. 鈥淭here鈥檚 little chance of that happening. The private equity companies that had a look at Taylor Wimpey were too greedy in what they wanted,鈥� said the source close to the talks.

Taylor Wimpey declined to comment.

A final deal is expected before the end of April after a formal 21-day consultation process with bondholders. It is understood the company already has the backing of 70% of the bondholder group while the banks and private placement debt holders are reportedly on board.

A deal is expected to be put to bondholders next week in time for approval before the end of April.

The source added that squabbles among bondholders and private placement noteholders over their fees for agreeing the deal had slowed the process in recent weeks.