Barratt considers commercial property division sale - reports
Barratt Developments was today said to be considering the sale of its commercial property division to ease the company’s £1.7bn debt burden.
The Newcastle-based company, which took on the debt in its £2.2bn acquisition of rival Wilson Bowden more than a year ago, has appointed consultant Jones Lang LaSalle to help with a possible disposal, according to newspaper reports today.
The sale of Wilson Bowden Developments could net £250m for the group, whose fortunes have suffered in a slowing housing market. It briefly became the UK’s biggest housebuilder following last year’s deal, but dropped out of the FTSE 100 Index in December as its shares were hit by the credit crunch.
Barratt, which declined to comment on the speculation, has a market value of £1.3bn - well below its debt burden - as its stock has tumbled by more than two-thirds since February 2007.
A trade buyer is seen as the most likely purchaser, although a tougher commercial property market and more expensive debt in the credit squeeze could hinder a sale. Barratt may also consider a partial sale of the business, the reports said.
