Bankers Tell B&B its Time is Nigh

Bankers to Sydney-based Babcock & Brown have given the infrastructure funds company just days to reach a new agreement over restructuring its debt or risk being placed into receivership, The Age reported today. Babcock shares and its subordinated notes, already under a trading halt, were suspended yesterday as it attempted to secure the release of up to $150 million in deposits from the HypoVereinsbank, which is an unsecured lender to Babcock. Babcock executives and directors remained locked in talks with the German-based bank, with these funds critical to the survival of the Australian company, which is also attempting to convince its banks to agree to an onerous debt repayment program. With an uncertain outcome, nerves are are on edge among Babcock's syndicate of 25 lenders, which is considering a debt restructuring proposal put by Babcock. One banker close to the debt talks said the bankers were now analysing the fundamental issues surrounding Babcock rather than whether it can just meet its next payment hurdle. The failure of Babcock, which oversees critical infrastructure ranging from power plants to ports, would be a headache for governments here and around the world as the management vehicles are unwound. In an attempt to fight off collapse, Babcock last week dramatically widened its restructuring brief, pledging to cut two-thirds of its workforce and scale back its business. Read more.