UPDATE 1-Australia's CSR says to raise A$375 mln

* Taps shareholders for about A$375 mln

* Offer at 16 pct discount to last traded price

* Reiterates 2010 earnings forecast (Adds details)

SYDNEY, Oct 26 (Reuters) - Australian sugar and building materials firm CSR Ltd (CSR.AX) will raise about A$375 million ($345 million) in equity to cut debt and facilitate the planned spin-off of its sugar business, the company said on Monday.

CSR said it was on track to achieve the split of company by March 2010 and added the capital raising will enable the two listed company to have appropriate levels of debt.

The company announced in June it would split off the sugar business to boost value for shareholders. The decision came after years of speculation that it would make the move.

CSR's capital raising will help the company to cut its gearing level to about 33 percent from about 47 percent.

CSR, which is the final stages of due diligence over the demerger, also reported a half-year net loss of A$155.6 million, including one-off items, and reaffirmed its full-year guidance.

The company is selling new shares at A$1.66 each, a 16.4 percent discount to its last traded price.

"The capital raising is part of out wider financing strategy to enable each company to have a capital structure for its respective industry and strategy," Chief Executive Officer Jerry Maycock said in a statement.

UBS and Royal Bank of Scotland are the underwriters to the offer, while Goldman Sachs and Lazard are advising CSR on the demerger. ($1=1.086 Australian Dollar) (Reporting by Denny Thomas;) ((denny.thomas@reuters.com; +61 2 9373 1812; Reuters Messaging: denny.thomas.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))