Stalled projects and restructuring have spurred speculation about the fate of Irvine-based homebuilder John Laing Homes.
Some possible scenarios, according to industry sources are:
n A sale of John Laing by Dubai-based Emaar Properties, which paid $1.1 billion for the homebuilder in 2006.
n A return of former chief executive Lawrence “Larry” Webb, who left in 2008, to lead a prospective turnaround.
n A potential bankruptcy filing.
Last month, John Laing said it was “reviewing all potential options to meet its capital requirements” as it struggles with the prolonged housing downturn.
In the past month, John Laing has stopped work on a number of big projects and closed sales offices in California, Colorado, Texas and Arizona.
It also has cut staff and is reported to have hired Chicago-based restructuring consultant Development Specialists Inc.
More details will come shortly, according to John Laing.
It’s likely the toughest period yet here for John Laing, which got its start in the U.S. in 1984 as part of Britain’s John Laing PLC.
The homebuilder, which was sold to Webb and other executives in 2001, is widely considered to be one of the better-run in the country.
John Laing was expected to weather the downturn better than others thanks to the strength of Emaar, a builder of office and condominium towers, hotels, malls and other projects in the United Arab Emirates and other countries.
But John Laing’s lifeline could be fraying.
Trade publication Builder Magazine cited sources familiar with the situation saying that recent moves by John Laing were prompted by Emaar’s decision to cut off funding.
It was estimated that Emaar has put at least another $600 million into John Laing since its acquisition two and a half years ago at the peak of the housing market.
Emaar faces financial issues of its own, thanks to a housing and construction slowdown in its homeland.
More than half of the United Arab Emirates’ construction projects have been put on hold and property prices have declined by as much as 25% since their September peak, according to reports last week.
The developer took a nearly $200 million write-down on John Laing in its most recent earnings report in October.
In Central and Northern California, John Laing has shut down construction on at least a dozen housing developments from Sacramento to Sunnyvale, according to reports.
Work in Colorado, the company’s second largest market, has stopped with sizable layoffs.
The status of John Laing’s local projects is unclear.
The company is selling homes at seven developments in Orange County. John Laing’s luxury division,believed to be holding up better than the rest of the company,is building at another two projects, in Crystal Cove and San Clemente.
Jobs have been cut at the company’s new headquarters.
John Laing officials declined to specify the number of cuts the local office, which opened last year at Impac Centre on Jamboree Road near MacArthur Boulevard.
Sources put the recent cuts close to a third of John Laing’s local workforce, which already saw a round of cuts last year. The Business Journal estimates the company has about 100 local workers.
There’s talk the company could be adding at least one job. Industry chatter is that many at the company are pushing to bring back former chief executive Webb, either in an executive or consultant role.
Webb left the company in May, two years after engineering the sale to Emaar. He could not be reached for comment last week.
Webb has his hands full leading a reorganization of Miami-based master developer LandSource Communities Development LLC.
Along with Timothy Hogan, the former chief executive of Costa Mesa-based Warmington Group’s homebuilding arm, Webb was tapped late last year to lead LandSource, which filed for bankruptcy reorganization in June.
Hogan and Webb are operating as Costa Mesa-based HoganWebb LLC. Hogan told the Business Journal in September that he has no idea if the LandSource partnership would be the first of several HoganWebb projects, or a onetime deal.
