according to the australian newspaper, page-3

Here's the Australian Article. Interesting read...nailbiting weekend coming up.....

Babcock & Brown's board in crisis talks
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Scott Murdoch | January 09, 2009

Article from: The Australian
THE board of Babcock & Brown was locked in crisis talks last night as it digested the response of its banks to the company's survival proposal.

The partial response from the domestic and international banking syndicate of 25 was received by BNB early yesterday afternoon, after the company had lodged a revised business plan.

BNB, in a last-ditch attempt to survive, has tried hard to persuade its banks to approve a debt for equity swap similar to that agreed for Centro. This would free up cash and reduce debt.

However, it is understood the banks have put a number of tough proposals to BNB, and these could sow division between the company and its backers.

The Australian banks are believed to be keen for BNB to survive.

The big four retail banks are working on a way forward for the investment group, to avoid pushing it into administration.

The company was forced by the banks into a trading halt yesterday because of the volatility of its share price and trading volumes this week.

A full response from the banks is expected to be released to the market on Monday, and this will decide BNB's immediate future. BNB's latest business plan is also expected to be released.

The massive write-down in asset values by BNB on Wednesday night is thought not to have shocked the banks, given the current state of asset markets.

BNB warned on Wednesday that its net asset position, previously put at $2.6 billion, would now be substantially negative, given the plunge in recent valuations, a position largely assumed by the market.

The financial markets appear to be suspicious of BNB's planned debt for equity swap, given the failure of others that have carried out similar transactions.

Analysts who observe BNB said the "scorched earth" approach to asset sales and valuations was similar to that of Allco before its collapse.

Citi analysts dumped coverage of BNB yesterday, after reporting that it believed the negative asset position rendered the company "sub-investment grade".

"There is an increasing risk that the company could breach its debt covenants over the next 18 months," an earlier Citi report said.

"While the stock appears cheap and trends in its core asset classes such as wind energy and aircraft leasing remain solid, industry-wide and company-specific issues have impacted the group and its listed funds, resulting in poor news flow of late, which will likely impact future earnings and take significant time to rectify, and for market sentiment to return."

The stock has recorded wild trading in the past week. BNB shares jumped 52 per cent on Tuesday on buying by non-institutional investors.