B&B under review
(17 June 2008 – Australia) Following the rapid plunge on the ASX over the past week, Babcock & Brown is carefully reviewing its precarious position.
Babcock & Brown’s A$2.8 billion three year facility was reviewed, extended and signed off by its banking syndicate in April 2008. The extension takes the facility to 2011.
While the facility banks have not yet made any decision as to wether they deem review action to be appropriate, the share price has gone below the minimum market capitalisation requirement of $2.5 billion or $7.50 a share.
Trevor Loewensohn, head of capital markets for Babcock & Brown said that while they will soon meet with their banks, it is business as usual with activities continuing as part of the normal business plan.
Despite this, the investment bank said that it would appoint at least one investment bank as an adviser to review and clean up the business.
Babcock & Brown will review arrangements to remove the gap between the underlying asset values and the current trading prices as well as to respond to market concerns about the listed fund structure.
As part of the internal review, Babcock will appoint an independent chairman to each of the four funds that do not have them. These are B&B Infrastructure, B&B Power, B&B Wind Partners and B&B Residential Land Partners.
If the syndicate banks call for a review it would entail a four month consultation period with lenders, which the bank has assured with not impact on its access to its corporate debt facility.
While the facility banks have not yet made any decision as to wether they deem review action to be appropriate, the share price has gone below the minimum market capitalisation requirement of $2.5 billion or $7.50 a share.
Trevor Loewensohn, head of capital markets for Babcock & Brown said that while they will soon meet with their banks, it is business as usual with activities continuing as part of the normal business plan.
Despite this, the investment bank said that it would appoint at least one investment bank as an adviser to review and clean up the business.
Babcock & Brown will review arrangements to remove the gap between the underlying asset values and the current trading prices as well as to respond to market concerns about the listed fund structure.
As part of the internal review, Babcock will appoint an independent chairman to each of the four funds that do not have them. These are B&B Infrastructure, B&B Power, B&B Wind Partners and B&B Residential Land Partners.
If the syndicate banks call for a review it would entail a four month consultation period with lenders, which the bank has assured with not impact on its access to its corporate debt facility.
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