BBI
Troubled Australian ports investor Babcock & Brown Infrastructure (BBI) has revealed it has entered into an interim agreement with a potential cornerstone investor about a recapitalisation plan.
The announcement to the Australian Securities Exchange said that the two parties “continue to negotiate in good faith the development of a proposed transaction”.
The statement continued: “This agreement includes a non-solicitation obligation on BBI, a capped cost reimbursement provision in favour of the potential cornerstone investor and a three month right of first refusal over the sale of certain assets, if BBI chooses to sell those assets.”
The downturn in the world economy has hit BBI very hard. It recently reported a net loss of A$977m (US849m) for the year ended June 30 following a A$44m loss a year earlier, and has seen its stock price decline into the “penny dreadful” category of less than 10 cents.
However it still retains several key infrastructural investments, among them the wholly-owned Dalrymple Bay Coal Terminal in Queensland.
In order to reduce debt it has been trying to sell several assets and has said it has received several expressions of interest for the coal terminal.
The emergence of a possible “white knight” cornerstone investor could be the positive development BBI requires to stablise itself, without having to jettison too many of its core investments.
