update from bbp

Hi All,

got an update from BBP from all my questions

Why is the current CEO getting paid to much? It looks like to me that his pay packet is about 5% of the market cap of BBP?



As a BBP securityholder you will be aware that BBP is a business of significant scale. It owns 12 operating power stations and a number of additional assets including the Alinta retail operation and has forecast EBITDA in the range of $330-340 million in the 2009 financial year.



There are also a number of significant challenges facing the Board and senior management team of BBP, including determination of a more appropriate capital structure for the business, separation from the Babcock & Brown Manager and management of the impact of the proposed Carbon Production Reduction Scheme legislation to name a few.



At the Annual General Meeting in November 2008, we provided an update on plans to strengthen the capital structure of BBP, which is considered critical to improving the value of BBP for securityholders. The CEO is playing an integral role in this process and is very focused on reducing BBP’s debt levels. We will provide a further progress update when we announce our interim results on 27 February 2009.



The Board is aware that to operate a business of such scale and manage these challenges appropriately it is imperative that the key management personnel, including the CEO, have the appropriate skills and experience. Prior to joining BBP, Mr Rolfe held a range of Chief Executive Officer positions in the Queensland Government, including the Director General of the Department of the Premier and Cabinet, and in industry in Queensland, including CEO of Stanwell Corporation, one of Queensland’s largest energy generation companies. He was also the Co-ordinator General in Queensland – a position he held for six years. In this role Ross was responsible for the delivery of the South Queensland Regional Infrastructure Plan, the design and implementation of the Water Grid and the development of the Queensland Government’s Energy policies in 2000 and 2007. He is also a member of the Board of Infrastructure Australia; member of the National Board of Infrastructure Partnerships Australia and a Non-Executive Director of WDS.



The salary package approved by the Board was considered necessary to attract a candidate with Mr Rolfe's experience and capability. I would like to add that the Board also sought independent advice from PriceWaterhousecoopers (PWC). PWC confirmed that this package was appropriate in light of the scale and complexity of the BBP business.


Can the share holder like myself have a vote in this package?

The remuneration report for BBP is presented at the Annual General Meeting each year but the shareholder vote is advisory only. Ultimately the Board has authority to determine salary packages for senior executives such as Mr Rolfe without shareholder approval.



How is the sale process going with the sale of the assets and do you know when the news is coming out to the market ?



The sale process is ongoing. We will try and provide a timetable update at the interim results presentation on 27 February, provided we have more clarity at that point in time.



How does the recent news with Babcock and Brown effected Babcock and Brown Power?



If Babcock & Brown Ltd (BBL) were to be placed in receivership or administration, it should have no impact on BBP. The BBP Manager, Babcock & Brown Power Management Pty Ltd (BBPML), is a separate legal entity to BBL and should not be impacted by the insolvency of BBL. If the BBP Manager was declared insolvent (at this point in time we have no reason to believe that it will be) and was not replaced by a suitable B&B entity, then BBP can terminate the Management Agreement with the BBP Manager.


Cheers