LONDON (Reuters) – Creditors of Crest Nicholson [CRTNC.UL] have scheduled a court hearing to review a deal on the UK housebuilder’s debt, two sources close to the deal told Reuters on Thursday.
One of the sources said lenders might cancel some or all of the debt in exchange for ownership of the company in a debt-for-equity swap.
The scheme of arrangement will be put before a court at a hearing scheduled for Feb. 9, one of the sources said.
“The proposals have not been finally signed off, but it is fairly imminent as a court date is looming,” said the source.
Castle Bidco, a joint venture between entrepreneur Tom Hunter and Bank of Scotland, acquired Crest Nicholson in 2007 for 715 million pounds ($1 billion), backed by 1.12 billion pounds of debt.
The financing for the acquisition was fully underwritten by Bank of Scotland’s parent HBOS, now part of Lloyds Banking Group (LLOY.L).
Crest Nicholson declined to comment on the details of the talks, after putting out a statement on Wednesday. “I can confirm that we continue to make good progress with our stakeholders and our ultimate aim remains securing the long term future of the business,” Chief Executive Stephen Stone said in the statement.
Lloyds did not immediately comment.
By Tom Freke and Zaida Espana
(Editing by Douwe Miedema and David Holmes) ($1=.7087 Pound)