- Australian investment firm Babcock & Brown Ltd won a financial...

- Australian investment firm Babcock & Brown Ltd won a financial lifeline on Thursday, persuading creditors to refinance its debt and breathing life back into its critically ill share price.

Babcock shareholders have lost almost everything this year, leaving the former blue-chip prey to speculative investors who sent the stock soaring, despite also learning on Thursday of a dividend suspension and a possible debt-for-equity swap.

Babcock, a company once worth around $6.5 billion, has lost 99 percent of its value this year, reduced to a speculative penny stock by the global credit crunch which sparked panic over a debt-funded business spanning rail, toll roads and real estate.

"Potentially, there is something here that suggests that maybe, just maybe, Babcock has a life," said Angus Gluskie, portfolio manager at White Funds Management.

Babcock's shares came out of a two-week suspension after the news and more than doubled in value to A$0.48 at 0120 GMT. They peaked last year at almost A$35.

Uncertainty over a possible debt-for-equity swap made it hard to say where the shares would settle.

"It's very hard to judge where the shares will ultimately be, even if the company survives, whether the shares will be worth 10 cents or a dollar," Gluskie said.