(Corrects share price movement to fall of 10.5 percent, not rise of 9 percent, after technical failure on stock quote page)
* To issue total 455 mln new shares via placing, open offer
* Says not in breach of banking covenants
* Scraps final dividend
* Says 2008 underlying pretax profit down 2 pct
* Shares fall 10.5 percent (Adds detail, management, analyst comment, share price)
LONDON, March 18 (Reuters) - Insulation and roofing group SIG Plc reported a fall in 2008 profit on Wednesday and said it would scrap its final dividend and raise 341 million pounds ($479 million) by a placing and open offer.
Sheffield-based SIG, which has been hit by a slowdown in the building sector, added it was not in breach of banking covenants on its debt, which stood at 697.1 million pounds at the end of 2008, inflated by the depreciation of sterling.
"This has given us a solid platform against the possibility of tough trading conditions," FD Gareth Davies told Reuters, adding the fresh capital would all be used to repay its debt.
"Should the placing and open offer succeed, we believe that net debt/EBITDA will fall comfortably below 2x and lift any financial concerns hanging over SIG," said Flor O'Donoghue at Davy Research.
Underlying pretax profit fell 2 percent to 137 million pounds in 2008, slightly lower than the average forecast of 139 million in a Reuters poll of eight analysts.
Without a final dividend, SIG's interim dividend of 8.3 pence forms the entire payout to shareholders for 2008, down from 26.7 pence for 2007.
The company also said it would deliver net cost savings of 47 million pounds in 2009.
The company's shares were down 10.5 percent at 94 pence at 1000 GMT.
Shares in SIG have fallen 86 percent in the past year, as trading has been knocked by the downturn in residential building in the UK and Ireland. The group had a market value of 159.3 million pounds at Tuesday's close.
CASH CALL
SIG's cash call, which it had said it was considering earlier in the week, follows in the footsteps of building supplies company Wolseley, which raised 1 billion pounds earlier this month to rebuild its balance sheet.
SIG said the issue price of 75 pence represents a 29 percent discount to the closing price of the shares on Tuesday.
It will raise 160 million pounds through issuing 213 million shares through an 11-for-7 open offer, and a further 181 million through a placing, issuing 242 million shares.
The capital raising needs to be approved by shareholders at SIG's EGM in April, with J.P. Morgan Cazenove and Panmure Gordon are acting as joint brokers for the fully underwritten placing and open offer.
SIG said it cut 7 percent of its workforce in 2008, totaling over 1000 jobs with further cuts likely this year, CEO Chris Davis told Reuters. The group's annual profit was hit by restructuring charges, writedowns at its Irish business and losses on financial instruments.
"We have a number of contingency plans in place should trading deteriorate further," Davies said.
The company said trading in mainland Europe has been strong. However the outlook for the UK and Ireland "is going to get progressively more difficult," said Davies. (Reporting by Lorraine Turner, editing by Will Waterman) ($1=.7126 Pound)