Levitt and Sons LLC, the company with ties to building the first planned suburb of Levittown, N.Y., is now on a work stoppage on all its projects. But it's not for inclement weather or a strike by its workers; the culprit is massive debt. Levitt is in the middle of negotiating terms with its lenders and says the stoppage is temporary. The company tells the South Florida Business Journal it is in "active discussions with our lenders to obtain additional funding."
Levitt and Sons, a unit of Levitt Corp., did not pay its roughly $2.6 million combined interest payment due on Oct. 10. The parent company reportedly said it is unwilling to lend Levitt and Sons additional money unless the unit's debt is restructured in a way that increases its ability to generate sufficient cash to meet its ongoing obligations. As of Sept. 30, Levitt Corp. said it had loaned about $84 million to Levitt and Sons to help it meet its cash requirements.
Levitt, like many homebuilders, has been negatively impacted by the weak demand for new housing. Homebuilders such as Hovnanian Enterprises Inc. have had to drastically lower the price of their new homes while others such as St. Joe's Co. have had to cut their work force and change their strategy. Levitt's slump is so severe that experts fear that it may be close to filing bankruptcy. The company is hovering near its 52-week low of $2 and has about $809 million of debt. — Gerald Magpily
See South Florida Business Journal article
See DealWatch: Homebuilders
See Dealscape posting: Oct. 8
See Dealscape posting: Sept. 17
See related story about housing's future from BloggingStocks
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