Wolseley looking to private equity group for up to £500m capital injection

Wolseley, the building materials distributor, is reported to be exploring the idea of raising up to £500m in rescue funds from investors and buy-out firms.

Wolseley has a network of 5,000 branches in 27 countries and has something of a headache with a debt burden which runs to £2.5bn.

By talking to investors, it hopes to pull that debt figure back.

The Daily Telegraph says: “Chief executive Chip Hornsby is also in discussions with private equity groups about raising additional capital in a private placement.

“A final decision on how much is required, is expected to be made during the next three weeks, which marks the end of the company’s financial half-year.”

Wolseley has already shed 14,500 jobs – representing 18% of its global workforce – since August 2007.

Its job peak was back in the autumn of 2006 when the figure stood at 84,000.

Analysts expect the company to survive the recession but insist that it will need a capital injection.

Today’s Financial Times adds: “If Hornsby decides to subscribe to the gloomiest projections about a broad economic recovery being delayed until next year at the earliest, he is likely to set in train a cash injection.

“He could also opt for a new round of job cuts.”