a few million here for bnb

B&B Capital plans to give $100m back
AdvertisementEmail Print Normal font Large font AdvertisementNovember 28, 2008

Babcock & Brown Capital, one of the satellite funds of the troubled investment group, plans to return $101 million to shareholders rather than reactivate a share buyback.

''The strong feedback that we have received from shareholders has indicated a preference for liquidity, specifically that a cash return would be a more favourably received than continuation of the buyback at this point in time,'' chairman Kerry Roxburgh told shareholders at B&B Capital's annual general meeting.

The cash return would equate to 60 cents per share and will require approval at a general meeting to be held before February 28 next year.

The buyback was suspended when B&B Capital began negotiations with parent Babcock & Brown Ltd to terminate the existing management contract.

Babcock & Brown has been in a trading halt since November 20 as it tries to convince its banks, which have lent the company $3.1 billion, to delay loan repayments.

Babcock & Brown shares last traded at 25 cents, after plunging from over $27 at the end of last year.

B&B Capital, which invests in a limited number of companies, will retain $225 million in cash reserves, saying tougher economic times forced it to retain more than the $150 million it said in February that it would retain.

Part of the retained cash will be used to pay Babcock & Brown $32.5 million to terminate the management agreement.

A further $17.5 million will be paid to B&B if a change of control at B&B Capital occurs before April 2010.

Shares in B&B Capital gained five cents to close at $1.43.

B&B Capital shareholders will vote on the termination of the management agreement at next year's general meeting.