not good news

ASX Release
7 January 2009
UPDATE ON FORECAST 2008 FINAL RESULT
Babcock & Brown (ASX: BNB) today advises that further to the announcement
to the market on 19 November 2008, following progress on the asset
impairment review process for its 2008 full year accounts, it now believes that
asset impairment charges will be such that the Company will be in a substantial
negative net asset position at 31 December 2008. This position encompasses
the reclassification of ‘non-core’ assets on the balance sheet as ’available for
sale’, in line with the Company’s revised business strategy announced to the
market on 19 November 2008. The impairment process is subject to finalisation
and audit review which will not be completed until closer to the scheduled
release of the Company’s results currently expected on 26 February 2009.
As detailed in its announcement on 4 December 2008 and reiterated in its
response to the ASX on 6 January 2009, the Company is in discussions with its
banking syndicate regarding a debt for equity swap or equivalent restructuring
to stabilise the long term capital structure of the Group. Any debt for equity
swap or similar arrangement will be designed to allow Babcock & Brown to
continue operating its business and sell assets with a view to reducing its
overall levels of debt. Any such capital restructure is expected to significantly
dilute existing shareholders, negatively impacting the value of equity.
ENDS
For further information please contact:
Kelly Hibbins
Babcock & Brown
+61 2 9229 1800
[email protected]
About Babcock & Brown
Babcock & Brown is an international investment and specialised fund and asset
management group with longstanding capabilities in structured finance and the
creation, syndication and management of asset and cash flow-based
investments. Babcock & Brown was founded in 1977 and is listed on the
Australian Securities Exchange.
Babcock & Brown operates from 30 offices across Australia, North America,
Europe, Asia, United Arab Emirates and Africa and has in excess of 1,400
employees worldwide. The company has established a funds management
platform that has resulted in the creation of a number of focused investment
vehicles.
For further information about Babcock & Brown please see our website:
www.babcockbrown.com

Basically from what I read:
- the Company will be in a substantial negative net asset position at 31 December 2008

- D2E swap is pretty much expected. Any such capital restructure is expected to significantly
dilute existing shareholders, negatively impacting the value of equity.