Apollo Management, the US buyout firm, has had an offer to inject capital into highly indebted UK housebuilder Barratt Developments spurned, according to The Times.
According to the report, Apollo offered to inject up to £400 million (€506 million; $782 million) into the company, which heaped on debt to fund its takeover of Wilson Bowden Developments last year. Its debt mountain is put at £1.7 billion, some £800 million of that needing to be refinanced by next April. As of today, shares are trading at 278 pence a share – some 75 percent lower than this time last year – valuing the company at £927 million.
News of the approach comes after Apollo’s investment in a UK estate agency was called into question. According to a report in the Daily Telegraph in March, Apollo might be forced to inject capital into Countrywide while debt in the company is trading at ‘distressed levels’ in the marketplace. An unnamed source was quoted as saying the firm was happy with its investment.
Since last year’s £924 million acquisition of Countrywide, shares in listed UK estate agencies have slumped amid a slowdown in the UK residential sector. Estate agent branches are folding in the UK at an alarming rate according to one study earlier this week. Debtwire, which monitors the health of companies, said 150 branches are closing every week.