Building materials giant Wolseley will not be forced to raise emergency cash to prevent a breach of banking covenants, according to sources close to its lenders. The claim follows reports that the company was seeking a lifeline of between ￡200m and ￡500m through a rights issue or private equity because of its ￡2.7bn debt pile. A source close to its lenders dismissed the suggestion and said extra funds would primarily pay for acquisitions, suggesting a likely figure of ￡500m. They said: "Wolseley doesn't need to raise cash because its covenants are fine. If it raises money it may pay down the debt in the short term-what else would you do with cash? But because it is operating within covenants it would take advantage of the downturn to buy bolt-ons."
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