Babcock & Brown says stock worthless as banks talk

Babcock & Brown says stock worthless as bank talks continue

Jan. 23 – Babcock & Brown Ltd., the Australian investment group whose debt-funded acquisition strategy crashed with the credit crunch, said its shares are now worthless as it tries to negotiate a restructuring plan with its banks.

“In the current market environment and based on continuing discussions with the banking syndicate there will be no value for equity holders under the revised business plan and balance sheet restructure of Babcock & Brown International Pty Ltd. and negligible or no value for holders of the company’s subordinated notes,” it said in a statement to the ASX.

An announcement on the talks with creditors may not come until the week starting Feb. 2, it said. A statement on talks to renegotiate A$150 million of short-term debt had been expected next week. The shares last traded at 32.5 cents before being halted from trading on the ASX on Jan. 18 and suspended on Jan. 12.

The reiteration that its shares have no value comes after the company on Jan. 7 said it had a “substantial” negative asset position and any restructuring was likely to significantly dilute its equity.

(Businesswire)

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