Heavily indebted Babcock & Brown Infrastructure (BBI) of Australia this week announced it had agreed a $1.6bn recapitalisation plan with Brookfield Asset Management of Canada.
Heavily indebted Babcock & Brown Infrastructure (BBI) of Australia this week announced it had agreed a $1.6bn recapitalisation plan with Brookfield Asset Management of Canada, subject to shareholder approval expected next month.
The deal would include a 49.9% stake in Dalrymple Bay (pictured), Australia"s biggest bulk shipping terminal, for $267m, as well as outright ownership of UK operator PD Ports.
BBI has been forced to try and sell off assets this year to help pay down debt of around $8bn, on which it says "considerable" repayments are looming. In the summer it already sold a 30% stake in Luxembourg-based Euroports, a bulk/breakbulk stevedore handling around 70m tonnes a year at 20 terminals across seven European countries. The Brookfield recapitalisation plan has been 'strongly recommended' by the BBI board to shareholders as 'superior to all of the alternatives considered.'
The PD Ports unit would change hands for a nominal fee - believed to be 1 Australian dollar. Brookfield has also agreed to immediately repay £100m of debts attached to the UK company." PD Ports operates the UK"s third largest port of Teesport, which handles around 50m tonnes of cargo a year, mainly bulk. It also has plans to invest £300m in a project to build a new 1.5m teu deepsea container facility, dubbed the Northern Gateway Container Terminal, targeting mainline boxship calls from Asia. PD Ports was bought for £260m plus debts in 2006, and earlier this year was valued by BBI at £500m.
Disposal of BBI"s remaining terminal assets will mark the end of its dream - hatched during the boom years up to mid-2008 - to build a global dry bulk terminal empire to match the success of global container port operators like Hutchison, PSA, DP World and Maersk