Builders tap the market
HOUSEBUILDER Barratt yesterday unveiled its widely tipped £750m fundraising through a rights issue and share placing in a bid to repair its battered balance sheet.
The group said it would raise £545.5m in a rights issues and £175m through a placing.
Chief executive Mark Clare said the 1.3 for one rights issue would be priced at 100p, a 37.8 per cent discount to Tuesday’s closing price. And the placing of 72.9m new shares would be priced at 240p a 10.6 percent discount.
The placing is underwritten by Credit Suisse and UBS, while the rights issue is underwritten by Credit Suisse, UBS, Barclays Capital, HSBC, Lloyds TSB and RBS Hoare Govett.
The cash call came as little surprise to City analysts who had been expecting the housebuilder to ask shareholders for at least £500m for some months.
Investec analyst Alastair Stewart warned the group still had “simply too much debt” and said that there remained a “risk of further write downs and a possible need for further equity injections in the medium term”.
Meanwhile, Redrow’s chairman Steve Morgan said the group would also launch a £150m rights issue after encouraging signs of stability in the property sector.
The 13 for 14 rights issue, priced at 105p is at a 53 per cent discount and is underwritten by Merrill Lynch and JP Morgan Cazenove.