TW, RDW and BDEV shares plummet

Permalink: TW, RDW and BDEV shares plummet
by Brian Turner

Shares in Taylor Wimpey (TW), Redrow (RDW) and Barratts (BDEV) plummeted this morning on news that Taylor Wimpey has been unable to secure funds from investors.

Such funding would have ensured that Taylor Wimpey could meet its bank covenants, making its future more secure.

Additionally, Taylor Wimpey has announced that it has scrapped its first-half dividend and that Finance Director Peter Johnson has resigned.

The company also announced the closure of one-third of its offices and 900 staff will be laid off.

The inability to secure funding to refinance the companys £1.9 billion debt panicked investors, causing TW shares to plummet more than 50% to just 30 pence per share on trading on the London Stock Exchange this morning.

Barratt Developments and Redrow, who are also renegotiating their debt, also suffered badly.

Shares in Redrow (RDW) fell 25% to 99 pence per share, and BDEV fell over 20% to just 44 pence per share.

The falls represent a catastrophic collapse of the largest companies in the UK building sector, with both Barratts and Redrow now worth only around 10% of their market valuation at the start of the year.

Other house builders have suffered, too.

Persimmon shares (PSN) have also seen heavy losses this morning, down 17.5% to 240 pence per share, down from 783 at the start of this year.

Bellway (BWY), Bovis (BVS) and Oakdene (OKD) also saw continued falls this morning, with each company now down to a third of its opening market cap at the start of the year.