Homebuilder up for sale amid debt problems

A large, private homebuilder has put its Calgary division up for sale and halted construction work at dozens of homes in the region amid reports of debt problems.

Dave Abbey, the sales and marketingmanageratReidBuiltHomes in Calgary, said the parent company Reid Worldwide Corp. is seeking letters of intent from potential buyers until the end of the month.

“They’ve gone through the books and realized that Reid Worldwide is overextended (in debt),” Abbey said. “They’re selling off assets to get back to their core business. Unfortunately, they view Calgary as non-core.”

Abbey said the sale and revelations of debt problems came after two senior executives were “removed,” and replaced.

The Calgary office had been informed about the sale less than a month ago, when “we were told everything was business as usual,” he said.

Last week, Abbey said the division learned all development planning and construction work would grind to a halt, with few exceptions.

It means work has stopped on upwards of 80 homes.

“I’m trying to reach every single customer to advise them of the situation to put their mind at ease,” Abbey said, estimating the projects will be on hold for about two months. “This has been an emotional roller-coaster. I’ve just been advised that I’m up for sale.”

The sale comes after another prominent Alberta homebuilder, Walton International Group Inc., and 32 of its affiliates sought protection from their creditors in an attempt to restructure.

In its filings under the Companies’ Creditors Arrangement Act, Walton said it posted $67 million in losses over three years after being hit by lingering effects of the 2008 financial crisis, a general decline in the U.S. real estate market and the recent Alberta recession.

Reid Worldwide did not respond to requests for comment on the pending sale of its Calgary division.

Founded in 1982 by Art Reid, the Reid group of companies is a privately held family enterprise that began in Edmonton before branching out across Western Canada and into the United States.

Last year, the company took out 62 residential building permits in the Calgary region, down from 126 in 2014. Among its recent projects are new or proposed homes at Fireside in Cochrane, Westmere Estates in Chestermere and Sky Pointe in northeast Calgary.

Abbey said homeowner deposits are protected by warranty.