trading again, page-11

Hi Guys,

http://www.smh.com.au/business/property-dealmakers-come-out-to-play-20091124-jbf5.html

DAWN OF PRIME

In what is almost a new float, Prime Infrastructure, the recapitalised Babcock and Brown Infrastructure, will start trading under the code PIH this morning.

There is a new register, led by the cornerstone investor Brookfield Asset Management with 39.91 per cent, and there are three new directors, appointed by the Canadian group.

Brookfield was meant to own between 35 per cent and 39.9 per cent of the company after the recapitalisation, depending on the take-up of the share purchase plan.

The fact it ended up with a stake at the upper end means many retail shareholders did not invest in the new vehicle after having been burnt by BBI. After a 4c a share distribution, BBI shareholders received only one Prime share for each 15,000 BBI shares owned.

Brookfield underwrote the first $87.5 million of the $250 million share purchase plan and clearly took up that portion, and the remainder was sub-underwritten by institutions that backed the recapitalisation.

Prime shares were in effect offered at $5.08, which compares with UBS's valuation of $4.89. The broker is concerned Prime's assets will depreciate by $340 million this year, compared with its guidance for $90 million of capital spending on maintenance.

UBS thinks that over the longer term capital spending on rail and port assets such as Prime's should be similar to depreciation.