Modular developer鈥檚 factory closed as it seeks buyer to shore up business
The shareholders of modular housebuilder Ilke Homes have put the troubled firm up for sale as it seeks fresh funding to keep going in the face of a looming cash crunch.
The move has seen the North Yorkshire-based firm which employs around 1,000 people, call a halt to work at its 250,000 sq ft factory in Knaresborough.
Ilke, which has delayed reporting its accounts on the advice of auditors, today confirmed it was looking for a buyer to purchase the whole of the 拢28m turnover firm 鈥� although is understood to be open to an alternative of selling a non-controlling stake in the business as well.
The firm said that without a new investor its 拢1bn order book of mainly affordable homes will not be delivered which amounts to around 4,200 units.
It said its 鈥渢urnkey鈥� development offering, where the company acquires land, secures planning permission and develops the site before selling the unit to a client, has been 鈥渃omplicated by uncertainty over planning policy and rising build costs鈥�.
It added: 鈥淲hile having delivered strong contribution margins, Ilke Homes now requires new investment to meet overheads, achieve further scale and become cash flow positive.鈥�
Ilke is currently owned by private equity firm TDR Capital, with other stakes held by Sun Capital, housing associations Guinness and Places for People and Fortress Investment Group. The sale of a controlling stake would see some of these existing shareholders have their stakes reduced.
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Patrick Bergin, chief financial officer at Ilke, said last week that the firm had been aiming to close a further funding deal on top of 拢100m fundraise which closed last year, but the proposed partner pulled out.
Ilke is more than two months late filing its accounts, which Bergin said was due to auditors wanting more funding on its balance sheet.
News of a possible sale comes at a time of significant uncertainty in the modular housebuilding sector following the closure of L&G Modular earlier this year, and the collapse of Urban Splash鈥檚 venture with Sekisui last year.
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