Home Builder Presley Weighs Its Options

Presley Cos., one of Southern California’s largest home builders, has hired an investment banking firm to help it resolve its financial troubles, a move that could lead to the sale of the company. The Newport Beach-based builder has been saddled with so much debt that it had a negative net worth of $5.7 million at the end of last year. With its ability to meet its future debt obligations uncertain, Presley said it hired SBC Warburg Dillon Read Inc. to “explore various strategic alternatives” including a debt restructuring or the sale of all or part of the company’s assets. Presley said its problems partly stem from the severe housing recession earlier in the decade. The company, the 14th-largest home builder in Southern California, constructs residential communities in Orange, Los Angeles, Riverside and San Diego counties, the Bay Area, Arizona, New Mexico and Nevada. Last year, Presley lost $89.9 million, including a non-cash charge of $74 million in the second quarter from writing down the value of some of its land holdings in the east San Francisco Bay area and the Inland Empire. Shares were unchanged at $1 in NYSE trading.