Thursday 4th December 2008
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Shares of Babcock doubled to 50.5 Australian cents on the ASX. They have fallen almost 100% this year as the slump in financial markets worldwide dried up credit and drove down the value of its leveraged assets.
The loan ranks ahead of Babcock's existing debt and must be repaid at the end of 2009, the company said in a statement. Babcock has suspended dividend payments and sought ways to recapitalize its balance sheet to avert bankruptcy.
Financial covenants on two existing loans have been suspended as part of the agreement.
Babcock had debt of almost A$10 billion in the month of August. The company is trying to avoid the fate of Allco Finance Group, a manager of funds that collapsed last month.
Babcock chief executive Michael Larkin thanked the firm's syndicate of 25 banks for its support.
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