Taylor Wimpey to issue 2,13 billion shares

Europe's largest house builder, Taylor Wimpey has issued 2,13 billion new shares in a bid to raise UK£ 510 million (€ 570 million) in fresh capital. The offer price of UK£ 0,25 (€ 0,28) per share represents a -48% discount on the company's closing price the day before the offer was announced

Under the terms of the offer, half of the new shares will be offered for sale to Taylor Wimpey's existing shareholders, with the other half being placed on the open market. Existing shareholders will be entitled to buy one new share for every current share they hold.

Proceeds of the offering will be used to reduce Taylor Wimpey's debt, and the company has earmarked at least the first UK£ 350 million (€ 392 million) raised for the early repayment of debt and redemption of bonds. It says that by reducing its debt burden it will save UK£ 325 million (€ 364 million) by the end of 2011.

Commenting on the share issue, chief executive Pete Redfern said, "While we remain focussed on managing cash tightly, following this equity raise, we are now in a strong position to focus on a return to profitability and to place Taylor Wimpey at the forefront of any housing market recovery."