Liberty International has confirmed plans to raise £500m to £600m through a placing and open offer to shore up its balance sheet and secure a crucial banking agreement.

The capital raising is aimed at providing the property group with the financial flexibility to deal with further declines in property values, as well as positioning it to benefit from any market recovery. The raising will allow Liberty to amend certain key lending conditions.

Liberty could withstand a further fall of 30% in the value of its assets if it raised £500m, while any extra is expected to see the company through a crucial refinancing of Lakeside shopping centre in 2011.

Financial Times, The Times