Cairn Said to Ready First Irish Homebuilder IPO in Decades

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Cairn Homes Plc will unveil plans for an initial public offering as soon as next week, the first for an Irish homebuilder in almost two decades, according to two people with knowledge of the matter.

Cairn Homes, set up last year and chaired by former KBC Bank Ireland boss John Reynolds, plans to sell at least 300 million euros ($328 million) to money managers before the shares start trading in London initially, said the people, who asked not to be identified because the matter is private. Credit Suisse Group AG and Goodbody Stockbrokers in Dublin are advising on the transaction, they said.

The company is weighing a second listing in Dublin, one of the people said. Spokesmen for Cairn Homes and Goodbody declined to comment on the plan. Officials at Credit Suisse weren’t available for comment. The Sunday Times first reported Cairn Home’s plans to float in February, saying it planned to list the following month.

Irish property developers eschewed equity markets to rely on debt financing for projects as house prices quadrupled in the decade to 2007. That resulted in a mountain of bad debt when the property bubble burst. Developers have been slow to accept the need for equity backing as the market rebounds, Finance Minister Michael Noonan said in March.

Reluctant Banks

Irish banks aren’t willing to provide more than 65 percent of senior debt for viable “shovel ready” projects, according to Noonan. To bridge the gap, developers must invest their own equity or find financing elsewhere.

Cairn Homes was founded by Scottish accountant Alan McIntosh and Michael Stanley, the company’s chief executive officer. McIntosh was was involved in setting up U.K. pub companies Punch Taverns Plc and Spirit Group Plc, according to the homebuilder’s web site.

The homebuilder is working on developments in Dublin, Galway and Meath, north of the capital, according to its website. Home prices, which fell by more than half during the crisis, rose 15.8 percent in April from the same month last year, the Central Statistics Office said. Still, values remain 37.8 percent below their 2007 peak.

McInerney Holdings Plc was the last Irish homebuilder to float on the Irish bourse, in 1997. It canceled its listing in 2010.

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