MADRID, July 23 (Reuters) - Europe's largest utility

Iberdrola on Wednesday launched a 5 billion euro ($5.87

billion) capital increase to help fund investments in power

grids in Britain and in the United States.

The company plans to increase its annual investments to

around 15 billion euros from a current level of around 12

billion euros, building on its shift towards upgrading and

expanding power grids in countries where returns are steady and

healthy, such as the U.S. and Britain.

The cash raised, along with debt, operating cash flow,

asset sales and partnerships will help fund the new strategy the

company will present in September.

The shares offered through a process of accelerated

book-building were set to be priced at 15.10 euros, one of the

bookrunners said. Iberdrola's share price closed at 15.895 euros

on Tuesday.

Spain's stock market regulator suspended trading of

Iberdrola's shares on Wednesday morning.

Separately, the utility said first-half net profit

declined 14% from a year earlier, when results included the sale

of gas assets in Mexico.

Net profit for the period was 3.56 billion euros ($4.18

billion) compared to 4.1 billion euros a year earlier.

Excluding one-offs, profit was up 20%, it said.

($1 = 0.8523 euros)