babcock & brown wins extra $150 million in bor

Staff reporter
Babcock and Brown has won the support of its 25 strong banking syndicate for an additional $150 million in borrowings to give it more time to proceed with a corporate restructuring and multi-billion dollar asset sale program.

The agreement between the former high flying infrastructure and investment group and its banks was due to be signed in Sydney tonight.

A detailed statement is being prepared for dispatch to the Australian Securities Exchange.

The $150 million in fresh financing will cover the deposit of a similar amount that was frozen by the Munich-based HypoVereinsbank about a fortnight ago.

Babcock and Brown had legal advice that it was entitled to access the funds on deposit. It is believed the dispute has remained unresolved despite the refinancing agreement.

Prior to the dispute over the deposit Babcock and Brown had put a proposal to its banking syndicate that involved repayment of half its $3.1 billion facility by 2011, the disposal of its leasing and real estate operations and the sacking of about 850 staff.

Chief executive Michael Larkin had warned that Babcock and Brown was likely to default on its loan covenants before the end of the year.