NEWPORT BEACH — Fast-growing home builder Capital Pacific Holdings Inc. said Monday that it's exploring selling part or even all of itself to new investors.
CPH, formed from the ruins of the J.M. Peters Co., said it has hired investment bankers from Morgan Stanley & Co. to help it evaluate its options. Nothing is ruled out, Chief Executive Dale Dowers said in an interview.
More than 60% of CPH is owned by Hadi Makarechian, who with Dowers bought the company for $47 million in 1992 from the Resolution Trust Corp., the federal agency that sold off the holdings of savings and loans seized in the 1980s. CPH's shares closed Monday at $2.125 on the American Stock Exchange, unchanged for the day but down 32% for this year. Its announcement was made after the close of trading.
The company, historically a builder of top-end homes in Southern California, has moved into Arizona, Nevada and Texas in recent years through acquisitions, while trying to broaden its products to include less expensive homes.
It currently is spending huge amounts of money developing Mulholland Park, 163 mainly million-dollar homes above the Braemar Country Club in the San Fernando Valley. So far, 66 have been sold.
"Right now we're tied up with these homes under construction," Dowers said.
Fueling the earlier expansion was $100 million in bond debt that carries a whopping 12.75% interest rate. While taking on more debt hasn't been ruled out, CPH is looking hardest at finding new capital from institutional investors or other private sources, executives said.
"We don't really want to increase our debt," Makarechian said in an interview. CPH said its expansion-minded business plan remains intact. In the past, executives have talked about buying companies in markets as far-flung as Utah and Virginia.
Morgan Stanley is expected to present the company's board with alternatives in two or three weeks, Makarechian and Dowers said.