some background info from July 29 2009BABCOCK and Brown...

some background info from July 29 2009

BABCOCK and Brown Infrastructure has revised an agreement to sell a stake in Euroports, with the purchasers to take a larger share at a reduced price.

Instead of an original plan to sell 29.7 per cent, BBI will sell up to 40 per cent of the company for E141.5 million ($242m) and recognise a pre-tax impairment of about E120m on disposal of the stake.

The sale price for the stake is about 14 per cent below the initial price on a comparable basis. BBI chief operating officer Russell Smith said the fall in price "is reflective of the current market".

Euroports is one of the largest port operators in Europe, with a portfolio of port concession businesses in more than 20 European locations.

Antin Infrastructure Partners and Arcus European Infrastructure Fund 1, previously called Babcock & Brown European Infrastructure Fund, will take a 34 per cent stake in the business.

Antin will hold a convertible bond in Euroports, which if converted would give it an extra 5.97 per cent in Euroports and leave BBI with a 60 per cent interest. BBI said it expected to complete the transaction late this month or early next.

BBI had originally said in December that it hoped to sell a stake in Euroports by late in the first quarter or early in the second quarter of this year.

The revised terms give the Euroports business a post-investment equity value of E353m, down from an implied value of E409.1m when the sale was unveiled in December.

The revised agreement includes a share equalisation process for 2012 and 2013 so that, depending on Euroports' performance, the stake held by Arcus and Antin could be amended to 34-65 per cent.

Mr Smith said the aim of the process was to "account for the unknown impact of the current recession".

"We're expecting the business to bounce back very strongly," he said.

Arcus and Antin are not as optimistic. In February, the group announced mark-to-market expenses from its interest rate swaps and foreign exchange hedges drove net losses in the six months to December 31 to $245.8 million.