First Irish homebuilder since 1997 set for IPO

Cairn Homes will unveil plans for an initial public offering as soon as next week, the first for an Irish home builder in almost two decades.

Cairn Homes, set up last year and chaired by former KBC Bank Ireland boss John Reynolds, plans to sell at least €300m to money managers before the shares start trading in London initially, said sources. Credit Suisse Group and Goodbody Stockbrokers are advising on the transaction.

The company could decide on a second listing in Dublin. Spokesmen for Cairn Homes and Goodbody declined to comment on the plan.

Cairn Homes’ plans to float were first reported in February, but it was expected to list the following month.

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 has said.

Banks aren’t willing to provide more than 65% of senior debt for viable “shovel ready” projects, according to Mr 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.

Mr McIntosh was involved in setting up UK pub companies Punch Taverns and Spirit Group.

Cairn Homes is working on developments in Dublin, Galway, and Meath.

Home prices, which fell by more than half during the crisis, rose 15.8% in April from the same month last year, the CSO said. Still, values remain 37.8% below their 2007 peak.

McInerney Holdings was the last Irish homebuilder to float on the stock market, in 1997. It cancelled its listing in 2010.