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Builders tap the market

HOUSEBUILDER Barratt yesterday unveiled its widely tipped &pound;750m fundraising through a rights issue and share placing in a bid to repair its battered balance sheet.&nbsp; <br /><br />The group said it would raise &pound;545.5m in a rights issues and &pound;175m through a placing.<br /><br />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&rsquo;s closing price. And the placing of 72.9m new shares would be priced at 240p&nbsp; a 10.6 percent discount.<br /><br />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.<br /><br />The cash call came as little surprise to City analysts who had been expecting the housebuilder to ask shareholders for at least &pound;500m for some months.<br /><br />Investec analyst Alastair Stewart&nbsp; warned the group still had &ldquo;simply too much debt&rdquo; and said that there remained a&nbsp; &ldquo;risk of further write downs and a possible need for further equity injections in the medium term&rdquo;.<br /><br />Meanwhile, Redrow&rsquo;s chairman Steve Morgan said the group would also launch a &pound;150m rights issue after encouraging signs of stability in the property sector.<br />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.