australian banks try to salvage babcock & brow

Australian banks try to salvage Babcock & Brown

By George Lekakis

Herald Sun

November 24, 2008 12:01am

LEADING Australian banks are trying to stitch together a rescue plan for Babcock & Brown as a group of German lenders to the troubled group agitate for the company to be wound up.

B&B shares are due to resume trading on the ASX this morning but uncertainty surrounding the group's ability to service its bulging bank debt is likely to result in the company seeking an extension to the trading halt.

Sources close to the company yesterday cast doubt on whether the company's scrip would trade again on the ASX amid heightened concern that its lenders will pull the plug on the group.

The depth of Babcock's woes are such that the company could be put in the hands of administrators before the end of the month.

B&B executives were in emergency talks on the weekend with representatives of a 25-member banking syndicate that is owed more than $3.1 billion.

It is understood that the Australian members of the syndicate - NAB, Westpac, Commonwealth and ANZ - are keen to find a way for the company to continue as a going concern but offshore lenders such as Germany's HypoVereinsBank (HVB) and West LB are losing confidence in the group.

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