Taylor Wimpey, Britain’s biggest housebuilder, saw its share price collapse after shareholders refused to stump up almost £500 million with a rights issue. The share price ended at 35p, a 42% drop, valuing the company at just £369 million. Its debts total £1.7bn.

It looks like Taylor Wimpey will have to cut costs to the bone, unless an overseas investor can be found to take up the shares that existing investors – led by the Toscafund hedge fund – won’t touch. The company plans to make 900 staff redundant and close 13 regional offices for starters.

The company claims to be confident that it will be able to find the money from somewhere, but it seems equally likely that it will have to look for a buyer.

Most of Taylor Wimpey’s debts are to a banking syndicate including Barclays, Lloyds TSB, HSBC and RBS, with more than £3560 million also owed to US pension funds.

The company has been hit by a blizzard of bad news in recent months: there has been a33% drop in  housing completions and a 45% in reservations.

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