Tuesday, September 22, 2009

Moar money pls, kthxbye

Barratt and Redrow to tap shareholders for £850m

Housebuilders Barratt Developments and Redrow are to announce fund-raisings of £700m and £150m respectively, as they repair balance sheets that have been ravaged by the recession. It was thought Barratt was going to ask investors for a smaller amount of £500m next week. However, the company may have brought it forward when it emerged Redrow was to move earlier. Neither company would want to risk investor fatigue by being the last in the queue to ask for more cash. Four housebuilders have already tapped the market. Taylor Wimpey, Bovis, Berkeley Group and Bellway have raised a total of over £600m this year.

Posted by little professor @ 11:38 PM (814 views)
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3 thoughts on “Moar money pls, kthxbye

  • no this is good news for the housing market because they will use the money to overtly or covertly buy land banks, which shows they are confident in the market going up up and away. See even their refusal to comment means they don’t want people to know their intentions in case the land values are driven up in anticipation of those eager buyers. That’s how it works – right kp?

    Now i have to extract my tongue from my cheek so i can drink my coffee.

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  • tyrellcorporation says:

    This is another reason why I got out of equities a few weeks ago. Sure I may have missed the peak but this rally will see every heavily indebted company (most of ’em) trying to tap shareholders. Mass dilutions in the next 2 quarters IMO.

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  • TW share price went up for a couple of months after their split.

    The fund raising is to pay down debt and the theory is it makes the company stronger, less interest payments and less chance of breaching covenants.

    The problem I see however is that valuations are not taking the TW debt seriously enough (which even after the rights issues remains huge), while taking the recent run up in house prices over the past few months far too seriously. Is there no bigger picture for these peo

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