Fletcher Building (ASX:FBU) plans a NZ$700 million ($641.2 million) equity raising to bolster its financial stability amid challenging market conditions.
The initiative includes a fully underwritten NZ$282 million ($258.3 million) institutional placement and a NZ$418 million ($382.9 million) pro-rata accelerated non-renounceable entitlement offer.
The company forecasts that the equity raising will reduce Fletcher Building’s pro forma leverage from 1.99x to 1.22x, supporting its commitment to retaining an investment grade credit rating.
Commenting on the development, incoming Group Managing Director and CEO Andrew Reding stated, "We believe the equity raising bolsters our financial position, assisting us to better endure near-term market headwinds. With a strengthened balance sheet, the company can focus on executing key operational initiatives in preparation for a market recovery."
Fletcher Building remains committed to ongoing cost reduction initiatives, targeting approximately NZ$180 million ($164.9 million) of overhead cost savings in FY25 to manage profitability amidst current operating conditions.
Fletcher Building is a New Zealand-based employer, manufacturer, home builder and partner on construction and infrastructure projects. Its segments include Building Products, Distribution, Concrete, Australia, Residential and Development, and Construction.