Move would help cut £1.3bn debt-pile and provide funds to buy land

Housebuilder Barratt is hatching plans to raise £500m via a rights issue, according to media reports.

Mark Clare
Clare: "No comment"

The move would help the company cuts its £1.3bn debt-pile and provide funds to buy land.

A Barratt spokesman declined to comment on the reports.

Pressure from the City has mounted in recent weeks for the company to raise cash from shareholders although Mark Clare, chief executive, has previously played down the need for such a move in the short-term.

At a trading update in May, he said: “There are no plans. But if the market continues to improve, who knows? If there comes a point when there are big opportunities, we need to look at options.”

In May, Building revealed that Barratt had held a series of informal talks about the possibility of a rights issue with its lenders since it refinanced in July 2008.

Its shares dropped 6% in early trading amid fears over the dilutive effect of any fund-raising.