BUILDING MATERIALS group, SIG, is selling new shares to raise £325 million to pay down debts due later this year.

The company, which owns Irish Insulation Solutions and Capco Roofing among others, said yesterday that it plans to issue and sell 455 million new shares in the business to raise the money.

SIG said that £78.8 million of its debts were due in June and July of this year, with a further £184.1 million due a year later.

While the company said it can meet these obligations from free cashflow, if sales were to weaken, it would be at risk of breaking its agreement with the banks.

As a result, it was issuing the new shares to guarantee it could meet the repayments and to put in place a “more appropriate” capital structure. The total amount raised would be used to cut its debts.

SIG does more than half its business in Ireland and in Britain. Sales in its Irish and British business rose almost 10 per cent to £1.67 billion in 2008. Like-for-like sales fell by £32 million or 2.2 per cent.

Underlying operating profit was down £10.1 million or 8.4 per cent at £11.12 million. The group announced yesterday that overall profit before tax was down close to 25 per cent at £107 million last year from £142 million in 2007.

Profit before tax fell almost 75 per cent to £33.1 million from £124.3 million.