Babcock & Brown to Unload Real Estate Holdings

Australian company Babcock & Brown is in the midst of making funding agreements with its financial institutions, hoping to find a solution to its current credit crisis.

Babcock & Brown has a strong cartel of banks, which includes the four largest banks in Australia. The company has stated that it is prepared to support a recently revised proposal in which $200mn would be infused into the syndicate so that it may go ahead with scheduled asset sales. B&B has not yet received support from some of its smaller banks based in Europe because the companies must have corporate headquarters approve the new agreement. Sources close to the deal say that it is likely that the new agreement will be signed but it hasn’t happened yet.

B&B plans to issue an update on Monday regarding the revised proposal but no definite plans will be released until Wednesday as it gets approval from offshore banks.

The new funding agreement includes the requirement that Babcock & Brown will decrease the number of banks it works with on a regular basis. The agreement has also permitted further involvement by McGrathNicol, who has been rumored to be B&B’s successor if the company fails to convince the syndicate that it is able to repay the proposed $3.1 billion in loans.

The funding will also give B&B room to complete asset sales already underway. Among these is the sale of its aircraft leasing operation as well as various real estate assets.

Bookmark: