CRH ’unlikely’ to seek Lafarge-style rights issue

CRH ’unlikely’ to seek Lafarge-style rights issue
25 February 2009

CRH is unlikely to follow French construction material groups Lafarge and Saint Gobain in pursuing a "rights issue" in the near term, unless it came across a large deal that would be too good to pass over, according to Merrion Capital.

The group’s stock plunged 17 per cent last week amid reports CRH may be planning to raise €1bn from investors -- only months after the group halted a share buyback programme, where it had acquired 3.3 per cent of its stock at a cost of over €400m.

Market talk of a rights issue was given further fuel as Lafarge and Saint Gobain each unveiled plans to raise €1.5bn from stock holders to shore up their balance sheets at a time of difficult trading for the sector globally.

CRH has declined to comment on the speculation.

But Merrion Capital analysts John Mattimoe and Killian Jones said yesterday that a similar move by CRH "is unnecessary and not without risk" and that this will be made clear when the group releases its full-year figures next week.

"It would be better to wait for compelling deals to materialise and then present the case for new equity, if debt capacity is insufficient," the analysts said.
Published under Cement News