On Wednesday, well-known British home builder, Barratt Developments PLC, announced a rights issue in order to raise 720.5 million pounds ($1.18 billion), which the company hopes will enhance its balance sheet and help it prepare for new land acquisitions.
For the year ending June 30, Barratt reported a loss of 486.6 million pounds, as compared to a profit of 86.4 million pounds a year earlier.
But the company is witnessing the return of a degree of stability to the housing market, after a prominent plunge in house prices and new construction due to the global credit crisis.
Barratt expects to complete 12,000 homes this year, down from 13,200 in the recent full year and more than 18,000 in the previous year.
The latest full year witnessed a fall in the average selling price by 14 percent compared to a year earlier.
As per the CEO Mark Clare, in the second half of the calendar year, the company was able to maintain price levels and increase reservation rates.
Clare specified further, “The board has therefore decided it is now an appropriate time to substantially strengthen the company's balance sheet and reduce its debt levels via a placing and a rights Issue. This will also enable the group to develop a number of its existing sites and to take advantage of land purchasing opportunities as they arise.”
. Contributed by Sunil Kumar)
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