Published 11 January 2009
Sydney-based international investment & specialised fund & asset management group Babcock & Brown sought a trading halt on the ASX on 8 January in expectation of a partial response from its banking syndicate to its December refinancing proposal. The company expected to get a full response before trading opened on Monday 12 January. Meanwhile, there’s been silence.Babcock & Brown told the ASX on 7 January it believed asset impairment charges would be such that, at 31 December, “the company will be in a substantial negative net asset position.
“This position encompasses the reclassification of ‘non-core’ assets on the balance sheet as ’available for sale’, in line with the company’s revised business strategy announced to the market on 19 November. The impairment process is subject to finalisation & audit review, which will not be completed until closer to the scheduled release of the company’s results, currently expected on 26 February.”
Babcock & Brown told the ASX on 4 December: “Babcock & Brown has undertaken to have in place no later than 9 January, a revised business plan acceptable to its banking syndicate that will address the repayment of the new short-term funding facility and form the basis of discussions to restructure its balance sheet.
“Babcock & Brown has submitted a proposal to the banking syndicate and, following receipt of a response from the syndicate, which may or may not accept this proposal, Babcock & Brown will make a further announcement to the market. Babcock & Brown expects that the response will be delayed until the week commencing 12 January.
“Babcock & Brown notes that it has previously foreshadowed a debt-for-equity swap as part of any permanent capital restructuring. Any debt-for-equity swap or similar arrangement to allow Babcock & Brown to continue operating its business and selling assets as appropriate will significantly reduce the value of any existing equity.”
The company’s shares peaked at $A34.78 18 months ago but were at A32.5c when trading was halted this week.
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Attribution: Company releases, story written by Bob Dey for the Bob Dey Property Report.