Stadium at risk as builder struggles

Jul 4 2008 by Alex Turner, Liverpool Daily Post

FINANCIAL problems at housebuilder Taylor Wimpey is raising questions over St Helens’s planned £25m stadium.

The rugby league club is planning to build an 18,000-capacity stadium on the former site of United Glass in the town centre.

But the £8m it is providing towards the scheme is coming from the sale of its existing ground at Knowsley Road to Taylor Wimpey.

On Wednesday, the housebuilder admitted it is facing serious financial difficulties and said it might breach banking covenants in February, 2009 “in certain negative market scenarios”.

Taylor Wimpey, then trading as Taylor Woodrow before a merger last year, agreed to buy Knowsley Road more than two years ago.

It plans to build 192 houses on the 3.75 hectare site when it becomes available, which is still at least two years away.

A spokesman for the housebuilder said: “Taylor Wimpey remain committed to the project. It will be really beneficial to the area, and the company wants to see it go ahead.”

In a trading statement on Wednesday, Taylor Wimpey said it remained “convinced of the fundamental attractions of the business over the medium and long term”.

St Helens chairman Eamonn McManus struck a note of optimism.

“We will monitor the position with Taylor Wimpey,” he said. “They are looking to refinance. The likelihood of them not being able to fulfil is remote. The only way they can’t is if they go bust.”

However, one city analyst, Alastair Stewart, at Dresdner Kleinwort, believes the company could be in dire trouble in the coming months. “The statement could not be more grim,” he said. “We believe there is a very real danger that the company faces collapse when covenants are tested in February.”

New stadium developer Langtree also remains positive about Taylor Wimpey’s ability to fulfil its part of the deal, but it expressed concerns that the delay caused by any potential public inquiry could have significant cost implications.

The project received planning approval from St Helens in May. Government Office North West must now decide whether to call it in for further review. A decision is expected by the end of the month.

John Downes, managing director of Langtree, said: “A public inquiry has got a direct financial implication for the project. It will be £500,000 just to turn up and service the inquiry.”

alex.turner