further reduction in debt structure

More positives in the wind for battle hardened BNB

Won't be long before a major upward correction

http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10525295

Overseas interests tipped in Powerco sale
5:00AM Tuesday August 05, 2008
New Zealand Herald
By Errol Kiong


An overseas interest is the likeliest buyer for the 50 per cent stake in electricity and gas company Powerco.

Listed Australian fund Babcock & Brown Infrastructure yesterday announced that it was looking to sell up to 50 per cent of New Zealand's second largest lines company as part of a capital management review.

It had announced the review on June 19 following a massive plunge in the share price of investment bank Babcock & Brown, which set up and manages the fund. The share price decline had prompted Babcock & Brown's lenders to review its three-year A$2.8 billion ($3.6 billion) debt facility negotiated in April.

Babcock & Brown Infrastructure said yesterday that following a number of unsolicited approaches, it had started formal price discovery processes for co-investment in up to 50 per cent of two of its core assets: Powerco and Australian rail network operator WestNet Rail.

Grant Williamson, director of sharebroking firm Hamilton Hindin Greene, said the move had been on the cards as Babcock & Brown looks to change its debt structure.



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"I suppose the surprise is that they're only looking to sell down a portion of it, rather than the whole lot.

"Powerco is a very good quality asset and therefore would be one of their easier ones to realise."

Williamson said the unsolicited interest in those assets indicated that it would be a reasonably quick selldown, most likely to an overseas buyer.

The unimpeded June sale of Vector's Wellington lines business to Hong Kong-based Cheung Kong Infrastructure Holdings and Hong Kong Electric Holdings, and Babcock & Brown Infrastructure's 100 per cent holding of Powerco, meant there was likely to be little in the way of regulatory hurdles, he said.

Should a sale proceed, Babcock & Brown Infrastructure intends to apply the proceeds to reducing its gearing.