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The foundering financial engineer is locked in a last gasp game of chicken with its bankers. Upping the pressure on the banks to either agree to a refinancing deal or pull the pin and own the debt themselves, Babcock requested a suspension of trading in its shares on Monday.

In early December the banks had agreed to negotiate a complex debt-for-equity deal whereby they would accept a large share issue in lieu of debt. They threw the company a $150 million lifeline to keep trading.

Under the proposal, ordinary shareholders would be diluted almost out of existence, yet the banks could at least punt on a work-out and win some breathing space to sell assets. A debt-for-equity swap would have a manageable impact on the company's capital, though delivering control to the bankers. For Babcock, it could have meant, at a considerable pinch, survival for a while.

There was a major sticking point however - $600 million in Babcock notes - unsecured, subordinated, cumulative, resettable notes to be precise.

Unlike in the US where it would be open to the banks to do a deal with the noteholders and dilute the notes into equity to turn the group around, the rub for the B&B banking syndicate is having to pay out the noteholders at $100 face value - they now trade at a few cents.

Further, most of Babcock's income from deal-doing and from its satellite trusts has evaporated as the satellites split away. And the asset sales program is captive to the dreadful global market conditions.

There is also the matter of varying agendas among the banks, dozens of banks. Some are exposed to the mother ship and satellites, others to the debt at the asset level. It's a negotiator's nightmare, especially as many of the banks themselves are in dire straits.

Even if the $3.3 billion in senior debt, amid the $11.5 billion in liabilities at head company level, could be refinanced it would require the debt-to-equity swap ... a prospect which is diminishing by the day and has led Babcock to suspend in a "put up or shut up" tactic of brinkmanship.

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BusinessDay