Babcock & Brown has requested its shares remain suspended from trading as it seeks funds to replace a deposit that's been seized by one of its lenders.
The shares will remain suspended as Babcock negotiates with its 25-company banking syndicate for a short-term loan, the Sydney-based firm said in a statement to the Australian stock exchange today.
Babcock & Brown (B&B) is an indirect shareholder in Eircom through its 8 per cent stake of Babcock Brown Capital Management (BCM), the satellite fund with a majority shareholder in the former state telco.
The Australian asset-manager which is struggling to stave off collapse didn't identify the lender that seized its deposit, expects to make an announcement on the matter by Wednesday.
Babcock, owner of assets from wind farms to properties, is trying to survive by selling assets to repay A$3.1 billion ($2 billion) in loans, firing two-thirds of its workforce and cutting businesses.
It's battling to avoid the fate of Allco Finance Group, a Sydney-based manager of infrastructure funds that imploded last month.
Babcock shares, which lost 99 per cent of their market value this year, traded at 25 Australian cents on November 19th when they were suspended amid speculation the company was unable to repay its debts.
Australia's five biggest banks have A$700 million of loans at risk with Babcock and overseas lenders including Royal Bank of Scotland have almost A$2 billion on the line, according to estimates by UBS AG.
German lender Bayerische Hypo- und Vereinsbank AG seized an account with A$140 million on November 19th, according to the Australian Financial Review.
Dieter Rampl, chairman of UniCredit SpA, which owns Bayerische Hypo, resigned as an independent director of Babcock on November 24th.
Wachovia on November 17th said it may seize collateral on a $112 million loan, signaling Babcock's bankers were losing patience with the company's plan to accelerate job cuts to avoid defaulting on debt.
Bloomberg