Foundering property group GPT is putting the hat around in a monster capital raising. It seems a press leak this morning on a $1 billion issue may have been the work of investment bankers trying to force the company into moving quickly.

GPT may be in desperate need of capital though it would appear to have been caught on the wrong foot. Otherwise the issue would have been announced early this morning. Instead, the stock went into a trading halt at 9.50am. One source said the size of the issue was more likely to be $1.6 billion to $1.8 billion but the marketing might have run into the odd obstacle.
 
For one, the insitutions are not happy with the idea of doubling the size of the stock just to bail out a managment which has patently failed them. Despite stiff opposition, a jv deal was struck with Babcock & Brown two years ago which is now being aborted.

GPT had been hoping to cash up and deleverage via asset sales but it is a case of "join the queue. Selling assets in a plunging market is simpy a recipe for tearing up money. If GPT can only raise $1 billion it may still have to go back to market.
 
The banks are not happy either. GPT has already been smacked by a credit ratings downgrade and is sailing perilously close to the wind on its debt covenants. This, from a stock which was once the bellwether of the sector, albeit boring but conservative. It's pipe and slippers time, more than ever, for the chairman and CEO.