Powerco sale in doubt; BBI cites hitch

Tuesday 24th February 2009

The sale of a half stake in Powerco is in doubt after Babcock & Brown Infrastructure said settlement of the deal has struck a hitch.

BBI was to have sold the Powerco stake to Australian fund manager QIC, under a deal that put an enterprise value of $2.05 billion on the New Zealand business and was to provide net proceeds of $400 million. Babcock planned to use the fund to repay debt.

"Issues have arisen which have created uncertainty relating to completion of the sale of an interest in the New Zealand business of Powerco," Babcock said in a statement to the ASX.

"BBI is working to resolve the issues but is not yet in a position to provide details of any outcomes."

The infrastructure investor, an offshoot of Babcock & Brown, had its stock halted from trading pending the outcome of the sale. They last traded at 6.8 cents on the ASX.

Shares of BBI have slumped 95% in the past 12 months as it lined up assets for sales to reduce its debt burden. Other asset earmarked for sale included WestNet Rail and BBI Euroports.

Powerco is New Zealand's second-largest electricity and gas distributor after Vector.

By Jonathan Underhill

Comments from our readers

No comments yet