once in a lifetime indeed, page-30

The risk in BBI will become far more evident as BNB's fate becomes known in the next week. The way this relates to BBI is well summarised by the Business Spectator below:


The share market reaction to the Larkin proposal was logical. Babcock & Brown shares fell to reflect the fact the company is anticipating severe impairment charges in the six months to December.

Larkin and his team can see from announcements made by others and by looking at their own valuations that asset values have to come down.

For example, anyone wanting a realistic assessment of the deterioration in the aircraft leasing market need only look at the two recent announcements to the New York and Singapore stock exchanges by Babcock & Brown Air and Babcock & Brown Global Investments.

The coming balance date will not only be a trigger for big write-downs at the Babcock mothership. Virtually all the Babcock listed funds are headed the same way judging from the huge differences between their share prices and net tangible assets.

Larkin wants to ring fence Babcock & Brown's investments in the satellite funds from the banks as part of his plan to shrink the company down to an infrastructure financier and manager. The banks may have other ideas. The stakes held in nine different listed funds are worth about $140 million at current prices.