dow jones newswires

SYDNEY (Dow Jones)--Babcock & Brown Infrastructure Trust (BBI), the specialist infrastructure fund, said Friday first half net losses soared on the back of derivatives writedowns, and flagged an uncertain trading outlook.

The group said it's pushing ahead with the sale of key assets, and signaled due diligence has begun on the Dalrymple Bay Coal Terminal, of which it could sell up to 49%.

BBI also said it has received interest for a 100% buy of what is a prime asset for the company.

A decision to proceed will depend on the prices and conditions of binding offers in the context of other asset sales processes," the company said in an ASX release.

The end of the second quarter has been set as a closing date for binding offers.

Chief Executive Jeff Kendrew said the company's preferred option is for a 49% sale of Dalrymple, but if the price is right, the company is open to selling its full 100% holding.

"We don't want to be backed into a corner, if someone is interested in 100%, and they are genuine and prepared to pay a premium for it then we're prepared to talk to them," he told Dow Jones Newswires.

On its other asset sales, BBI is finalizing a 29.7% stake liquidation in Euroports, with due diligence for a further stake sale underway.

Discussions over a Westnet Rail stake have been hit by market volatility.

"Recent volatility in international commodity markets and timing of customer-initiated growth projects has impacted on the price discovery timetable" for Westnet rail, BBI said in its statement.

It has also received interest from buyers wishing to take a stake in PD Ports.

Outlining headwinds ahead, BBI said trading conditions in the U.K. and Europe are particularly uncertain, as its PD Ports and Euroports operations feel the chill wind of the global economic collapse.

The global transport and energy infrastructure firm said the recognition of mark-to-market expenses from its interest rate swaps and foreign exchange hedges drove net losses in the six months to December 31 to A$245.8 million from A$10.2 million a year ago, while revenues bounced 26% to A$702.7 million from A$557.9 million.

The group will not be paying an interim dividend. A year ago it also didn't pay a dividend, but did pay 2.50 cents at the end of the 2007-2008 fiscal year.

Earnings before interest, tax, depreciation and amortisation, from both continuing and discontinued operations, rose 32.6% to A$433.6 million.

At 0220 GMT, Babcock & Brown Infrastructure was down 0.2 cent or 3% to 6.5 cents.

BBI said has no material debt requirements or refinancing needs for the remainder of its fiscal year, and highlighted existing undrawn debt facilities of A$961 million to fund near term capital spending needs.

The infrastructure company is split across two asset classes, Energy Transmission and Distribution and Transport Infrastructure.

Earlier this week the group completed the sale of a majority stake in its fully owned New Zealand power distribution business Powerco to Queensland State investment arm QIC for NZ$423 million (A$333 million).

-By Enda Curran, Dow Jones Newswires;

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