Heidelberg in 2.5bn issue to ease debts

HEIDELBERGCEMENT has unveiled a large capital raising that is likely to raise around &euro;2.5bn (&pound;2.2bn), as the German cement firm scrambles to slash its &euro;11.3bn debt mountain.<br /><br />The firm said it plans to boost its capital by 50 per cent by issuing 62.5m new shares in a rights issue of one new share for each two existing ones.<br /><br />Under the plans, the Merckle family is set to reduce its 72.4 per cent stake in the debt-laden company to a minority holding, after it said it will transfer its rights to the new shares to the banks managing the capital increase. <br /><br />In addition, the family &ndash; led by Ludwig Merckle &ndash; plans to sell 62.5m existing shares which, according to sources familiar with the deal, could see its stake shrink to less than 20 per cent. The firm&rsquo;s shares fell three per cent to&nbsp; &euro;41.90&nbsp; yesterday on news of the rights issue.<br /><br />Banks managing the capital injection have seen keen interest from prospective buyers and have fielded informal requests for individual stakes of more than three per cent, sources said yesterday. <br /><br />HeidelbergCement &ndash; part of the business empire built by Ludwig Merckle&rsquo;s father Adolf Merckle, who committed suicide in January &ndash; had previously divulged plans to sell non-core assets and bring in an outside investor.<br /><br />HeidelbergCement won a&nbsp; &euro;7.24bn lifeline from creditors in June, to restructure its debt which was inflated by the &euro;9.65bn takeover of UK rival Hanson in 2007.&nbsp; Merckle also pledged to sell&nbsp; Ratiopharm, the world&rsquo;s fourth-largest generic drugs maker, to further cut the family&rsquo;s debt.<br />