Wednesday 19th November 2008
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The company plans to split off and retain its infrastructure assets while lining other investments up for sale, it said in a statement. Its workforce will be cut by more than 60% to 600 by 2010, it said
Babcock, which modeled itself on Macquarie Group in pooling assets into funds and reaping management fees, is in talks with its banks to renegotiate some A$3.1 billion of debt. Rival infrastructure fund manager Allco Finance Group was handed over to outside managers as it loomed near default on its debt.
Wachovia Corp. may seize collateral on a $112 million loan, Babcock said earlier this week. It hasn't put a time limit on additional asset sales, giving it more flexibility to dispose of investments in a slumping market with little availability of credit. The stock tumbled 21% to 24.5 cents on the ASX today.
One of the group's funds, Babcock & Brown Infrastructure Group (BBI), separately said it is considering the sale of as 49% of Dalrymple Bay port, Australia's second-biggest coal-export facility. The sale may reap A$2.3 billion, the Australian Financial Review reported. Miners including Xstrata Plc has made the approach, the Review said.
Earlier this month, BBI agreed to sell 50% of the New Zealand assets of Powerco to Australia's QIC for about $400 million, to repay debt.
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