Saad Group sells 16m Berkeley shares
Riyadh, June 9, 2009
Berkeley Group said on Tuesday its largest investor Saudi Arabia's Saad Group has sold 16 million shares in the UK construction company at a discounted 701 pence each.
'It is our understanding Saad has sold 16.1 million shares at 701 pence,' a company spokesperson at Berkeley said. 'I hope that Saad resolves any issues that it has,' he added.
Shares in the housebuilder dipped as low as 13 percent on the news, after closing at 825 pence on Monday.
Saad Group said last week said it would restructure its debt after it ran into unspecified difficulties and the Saudi central bank froze the accounts of its billionaire chairman, Maan al-Sanea.
The situation has become bleaker for Saad, and the Gulf Arab countries in general, when ratings agency Moody's said on Monday that Saad's issues will affect the way it assesses privately held firms across the region.
Saad held 37.7 million Berkeley shares, nearly 29 percent of the company, at the end of April.
On an operational level, the only impact from Saad's difficulties will be felt by Berkeley's joint venture with its largest investor.
The companies announced a joint venture in April 2007 with the housebuilder contributing a maximum of 175 million pounds to three joint venture firms, which would focus on building up a long-term landbank of sites that could be developed over the next decade.
The housebuilder said on Tuesday the joint venture is a small, long-term project which will not affect the group. 'It's a tiny part of Berkeley's operations,' said a Berkeley spokesman.
'The timescales will shift a little, I don't think it really changes a great deal of what Berkeley might have the ambition to do,' Robin Hardy at KBC Peel Hunt told Reuters.
The UK housebuilder, which has weathered the UK downturn in construction better than its peers due to a much lower debt pile, raised 51 million pounds in a placing in February to enable it to buy land when the market starts to improve.-Reuters