Struggling Australian investment giant Babcock & Brown has appointed administrators to its listed arm, Babcock & Brown Ltd. Babcock & Brown confirmed earlier this year that its shareholders are likely to be left with nothing as the company divests its assets - including real estate - over the next few years to pay back some of the A$3.9 bn owned to senior creditors.
Struggling Australian investment giant Babcock & Brown has appointed administrators to its listed arm, Babcock & Brown Ltd. Babcock & Brown confirmed earlier this year that its shareholders are likely to be left with nothing as the company divests its assets - including real estate - over the next few years to pay back some of the A$3.9 bn owned to senior creditors.
David Lombe and Simon Cathro of Deloitte Touche Tohmatsu were named as voluntary administrators of Babcock & Brown after investors in the company's subordinated notes listed in New Zealand voted against the special resolution to restructure the notes.
The company stressed that the appointment of administrators to the listed unit was not expected to have any material impact on Babcock & Brown International Pty Ltd (BBIPL), the main operating and asset owning entity of the Babcock & Brown Group. BBIPL, the board said, would continue to operate and 'proceed with the orderly realisation of assets over an approximate two to three-year time horizon' to reduce debt.
The Sydney-based group - which built up huge debts to fuel its infrastructure, aircraft and real estate investment businesses - warned in February that it would have to appoint administrators if investors rejected a bid to change the terms of the notes.
Trading in shares in Babcock & Brown and the Australian subordinated notes has been suspended for some time. 'It is likely that trading in the New Zealand listed notes will now also be suspended, and that all these securities will be removed from the relevant exchanges,' the board said in a statement.
Babcock & Brown said while it believed that there will be value for BBIPL's corporate facility lenders, it did not believe that there will be any value for equity holders, and holders of the company’s subordinated notes following the completion of the BBIPL asset sale program.
'The Board and Management of Babcock & Brown deeply regret the loss of subordinated note and shareholder value that has occurred and acknowledge the financial hardship this has caused.'
