Fletcher Building's Equity Raising Announcement

Fletcher Building Limited (ASX:FBU) has announced an equity raising of NZ$700 million to strengthen its balance sheet and improve financial stability and resilience. The equity raising comprises a fully underwritten c.NZ$282 million institutional placement and c.NZ$418 million pro rata accelerated non-renounceable entitlement offer. The purpose of the equity raising is to reduce the company's pro forma leverage, support its commitment to maintaining an investment grade credit rating, and provide covenant headroom under its debt facilities. CEO Andrew Reding emphasized that the equity raising will bolster the company's financial position, allowing it to focus on executing key operational initiatives in preparation for a market recovery. The company also remains committed to ongoing cost reduction initiatives to manage profitability in the current operating environment, targeting approximately NZ$180 million of gross overhead cost savings to be delivered in FY25.

Executive Commentary on Equity Raising

The equity raising is a strategic move to fortify our financial position and ensure resilience in the face of challenging market conditions. It will enable us to maintain an investment grade credit rating and provide the necessary flexibility to navigate the current environment. We are focused on executing key operational initiatives and driving cost reduction efforts to enhance our profitability. This equity raising will support our commitment to delivering long-term value to our shareholders and stakeholders.

Equity Raising Summary and Outlook

Fletcher Building Limited (ASX:FBU) is conducting an equity raising of NZ$700 million to strengthen its balance sheet and improve financial stability and resilience. The company's investment thesis remains strong, focused on markets with attractive long-term opportunities. However, recent trading has been impacted by challenging market conditions, with a decline in housing activity and slowing demand. The offer is expected to reduce the company's pro forma net debt and leverage, supporting its commitment to maintaining an investment grade credit rating and covenant headroom under its debt facilities. The company is focused on delivering cost reductions and managing profitability in the current operating environment. The offer details and timetable have been provided, outlining the process for shareholders to participate in the equity raising. The company's ambitions include executing key operational initiatives and driving cost reduction efforts to enhance profitability and prepare for a market recovery.