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Tulloch’s Safe Thanks To £50m Debt Swap With Lloyds, Says

Inverness-based housebuilder Tulloch Homes can breathe a sigh of relief about its future as Lloyds bank has carried out a debt-for-equity swap to the tune of £50m, says debt management company Scottish Trust Deeds.


In April 2008 Bank of Scotland, now part of the Lloyds Banking Group, bought a 40% stake in Tulloch for £27.5m. This new deal will increase its stake in the housebuilding company to 90 million preference shares and will see £50m of the company’s £145m debt written off. However, combined with the £30m refinancing by Lloyds in December 2009, Tulloch will still be posting losses of £65m.

Tulloch chief executive, George Fraser, said: “This announcement is extremely good news for Tulloch, our people, our customers and the local economy. It cements the future of the company and means we can plan ahead with confidence. The deal places Tulloch on a secure, sustainable financial footing and we are forecasting a return to profit in the next financial year.”

This type of debt equity swaps are not unusual in the corporate world, with Lloyds having carried out a similar refinancing deal recently - estimated in the region of £100m - with the Gladedale Group, the company responsible for the re-development of the Edinburgh Royal Infirmary site.

Mr Fraser commented: “For virtually every housebuilder throughout the UK, the property downturn over the past four years has been challenging. Although Tulloch has fared better than most, with a relatively-buoyant Inverness market, it has, nonetheless, been affected by the conditions prevailing since the 2008 financial crisis.”

“We now have a robust, realistic and well-financed business plan, for the period ahead. We are confident of the financial performance of the company in the years ahead.”

With the new financing deal in place Tulloch’s has plans to build around 200 properties a year.

A spokesperson for Scottish Debt Solutions Company,, said: “It is great news that Tulloch’s future – and the future of its 120 staff – are secure. With high unemployment in Scotland, it’s vital the banking industry works together with the businesses of all sizes to help them survive the recession and play their part in bringing economic growth and prosperity back to Scotland.”


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