Miller eyes £160m cash injection in debt talks

CONSTRUCTION firm Miller Group is in advanced talks with private equity giant Blackstone to refinance its debt pile in a move expected to mark the bottom of the housing crash.

Blackstone's credit division, GSO Capital Partners, will inject 160 million of equity in the Edinburgh-based company and is expected to push the firm to consolidate the industry.

Miller has won a number of contracts estimated to be worth hundreds of millions of pounds to manage the development of housebuilding projects left unfinished by firms that have gone into administration, such as McInerney Holdings and Thomas Mitchell Homes.

Miller, Britain's largest private housebuilder, has an estimated debt pile of about 600m provided by a consortium of lenders including Lloyds Banking Group, Royal Bank of Scotland and National Australia Bank, with facilities extending to 2012.

Lloyds also inherited a 20 per cent stake in the business when it took over the failed lender HBOS.

Miller Group was the last firm in the UK to benefit from the investment largesse of former HBOS Corporate head, Peter Cummings.

The lender bought its stake in the firm at the start of 2008 from members of the Miller family, who wanted to cash in their holdings.

It was unclear if GSO is negotiating to take on Lloyds' 20 per cent stake, or whether the Miller family, which still owns 60 per cent of the firm, will sell more shares to the private equity firm.

Miller has been working with investment adviser Greenhill to help find an investor for the group ahead of refinancing its credit facilities next year.

Both Miller Group and Lloyds yesterday declined to comment on what they termed "speculation".