See the news re. agreement below. IMHO this is not actually a bad thing in the LT. THis is EXACTLY what BNB need to do, scale down their business and specialise.
Babcock sells Capital rights for $32.5m AdvertisementEmail Print Normal font Large font November 10, 2008 - 10:35AM
Advertisement Babcock and Brown Ltd (BNB) has agreed to sell its rights to manage Babcock and Brown Capital (BCM) for $32.5 million and will assist the satellite company to sell some assets.
BNB will sell its rights under its management agreement with BCM for $32.5 million in cash, thereby terminating the agreement, if shareholders approve the move at an extraordinary general meeting scheduled for February 28, 2009, the company said.
The parent company will also support the board of BCM in reviewing its asset portfolio which may lead to a change of control of BCM or a sell-off of the assets, the company added.
BCM has already received expressions of interest for the assets.
BNB's chief executive Michael Larkin said the agreement with BCM followed the parent company's commitment made in June to work with its listed funds to remove the gap between the underlying asset values and their respective trading prices.
"This initiative is also consistent with our objective of narrowing the focus of Babcock & Brown's activities, including our funds management activities," Mr Larkin said.
BNB will pocket $32.5 million from terminating the management agreement, as well as $12.5 million for terminating its preferred advisory mandate conditional upon a change of control occurring in BCM prior to April 30, 2010.
Another $5 million will go to BNB for advisory services related to BCM's asset sale review process if there is a change of control of BCM prior to April 30, 2010, BNB said.
Until shareholders vote on the changes, BCM's management team will continue to manage the satellite's asset portfolio.
If the termination of the management agreement is approved, BNB will be entitled to nominate one director for appointment to BCM's board until the earlier of April 30, 2010 and the date upon which BNB ceases to hold 10 million shares in BCM.
At 1038 AEDT shares in BNB were 11.5 cents weaker at 88.5 cents.
BNB Price at posting:
84.5¢ Sentiment: Hold Disclosure: Not Held
