Barratt Developments has ruled out any immediate need for a rights issue after pulling off a deal to extend its lending facilities.
Shares in Britain's second-biggest housebuilder climbed 24% on news that it had pushed back repayments of a £400m facility into 2011 and that lenders had relaxed their covenants.
Mark Clare, the chief executive, said yesterday: 'With the refinancing package in place we see no immediate need to issue equity.' Mark Pain, the finance director, added: 'We never discussed equity issuance with lenders and we gave no commitment to it during those discussions.'
The troubled construction company, whose shares have plunged 95% in the past year, was tipped to be preparing an emergency rights issue or even a debt-for-equity swap, three weeks ago. However, it has been able to reassure investors. Mr Pain said that he expected to sign the deal with lenders within weeks, not months. 'We have very detailed terms sheets and we're only down to the legal documentation now.' Barratt shares closed up 13p at 66p.
The Times, Daily Telegraph, The Independent