Specialist infrastructure company Babcock & Brown Infrastructure Group (ASX:BBI) has warned that its proposed recapitalisation plan and asset disposal may result in a $900 million impairment charge.
The company’s proposed plan involves a comprehensive equity recapitalisation transaction combined with the sale of certain assets and says it is in active dialogue with a cornerstone investor about a potential recapitalisation transaction.
Babcock & Brown Infrastructure says given the range of potential outcomes of the transaction, it stresses that the current position is still highly uncertain and there is no assurance that an agreement will be reached.
The company only recently incurred a pre-tax impairment charge of $895 million in its accounts for the year to June 30 resulting in a reported loss of $977 million.
In the company’s annual report auditors Deloitte, warned that there was a material uncertainty about whether the company can continue, which is an ongoing concern.
Deloitte says this concern is because the company’s liabilities exceed its current assets by $426.5 million, excluding those assets and liabilities that are up for sale.
Babcock & Brown Infrastructure posted a $45.6 million loss in 2008.
BBI Price at posting:
5.3¢ Sentiment: None Disclosure: Held
