Taylor Wimpey in £550m UK land holding write-down

Taylor Wimpey has announched a £550m write-down of its UK land holdings as it revealed plans to raise additional finance from shareholders.

In a statement to the City this morning, the company said that it remained within the terms of its banking covernants but that it has now amended the terms of its credit facilities with its banks.

"This includes suspending the covenant based on net interest in relation to EBITDA, which we believe is not appropriate in current market conditions, in favour of one based on cash flow, reflecting our ability to generate cash," the statement said.

Meanwhile the housebuilder said that it was in discussions with shareholders and other institutions regarding additional financing. An announcement with further details is expected soon.

The move means that Taylor Wimpey should avoid the more painful steps of a rights issue or a debt for equity swap.

The sizeable UK write-down came as Taylor Wimpey acknowledged that the UK was experiencing a "significant downturn".

In the US, which it said was showing signs of "improving stability", it wrote down the value of its assets by £70m. Its Spanish assets saw a £40m reduction.