Tuesday 20 March 2018

Cairn Homes to raise up to €400m as it goes public

Cairn Homes is looking to take advantage of the need for new houses in Ireland, particularly in Dublin
Cairn Homes is looking to take advantage of the need for new houses in Ireland, particularly in Dublin
Peter Flanagan

Peter Flanagan

IRISH home builder Cairn Homes has announced plans to list on the London Stock Exchange, in a move that will raise as much as €400m.

The firm, which is building houses at two locations in Dublin and has sites around the country, said it will seek to raise between €350m and €400m with the listing.

If all goes according to plan, the shares will start trading on June 10.

The initial public offering means Cairn will be the first Irish construction firm to join a stock market since McInerney Holdings listed on the Irish Stock Exchange in 1997.

Construction firms traditionally relied on bank loans to finance construction but Cairn will rely on equity financing, with the banks unwilling to provide significant debt since the property crash.

Cairn Homes was set up last year and is chaired by former KBC Bank Ireland boss John Reynolds.

The company was set up by chief executive Michael Stanley and Alan McIntosh. Mr Stanley is a former chief executive of Stanley Holdings, while serial investor Mr McIntosh was involved in Punch Taverns and other companies.

Cairn Homes chairman John Reynolds commented: "The Irish economic backdrop continues to improve underlined by the fact that Ireland has the joint highest GDP growth forecast in the European Union.

"These strong macro-economic conditions, together with a population that is forecast to increase to 5 million by 2031, will underpin a strong demand for homes over the coming years. We believe that this is a unique opportunity for our Company, our customers, potential investors and the sector."

Company chief executive Michael Stanley added: "Cairn Homes' IPO will give our company the platform for a new and sustainable approach to home building in Ireland. We are a well-capitalised business, governed by a strong independent Board, with an experienced management team committed to constructing the highest quality houses and apartments for our customers."

Mr Stanley added that fundraising was only part of the reason for Cairn to go down the IPO route as opposed to other forms of financing.

"This isn't all about funding, it is also about building a customer base [for Cairn].

"Co-founder Alan McIntosh comes from the PLC environment so is well versed in corporate governance etc and it is about providing services that as a PLC you have to do," he said.

Credit Suisse and Goodbody Stockbrokers are advising on the deal.

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