Archive | Babcock & Brown

Negative-equity Babcock & Brown awaits bankers’ decision on its fate

Published 11 January 2009

Sydney-based international investment & specialised fund & asset management group Babcock & Brown sought a trading halt on the ASX on 8 January in expectation of a partial response from its banking syndicate to its December refinancing proposal. The company expected to get a full response before trading opened on Monday 12 January. Meanwhile, there’s been silence.Babcock & Brown told the ASX on 7 January it believed asset impairment charges would be such that, at 31 December, “the company will be in a substantial negative net asset position.

“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. The impairment process is subject to finalisation & audit review, which will not be completed until closer to the scheduled release of the company’s results, currently expected on 26 February.”


Babcock & Brown told the ASX on 4 December: “Babcock & Brown has undertaken to have in place no later than 9 January, a revised business plan acceptable to its banking syndicate that will address the repayment of the new short-term funding facility and form the basis of discussions to restructure its balance sheet.


“Babcock & Brown has submitted a proposal to the banking syndicate and, following receipt of a response from the syndicate, which may or may not accept this proposal, Babcock & Brown will make a further announcement to the market. Babcock & Brown expects that the response will be delayed until the week commencing 12 January.


“Babcock & Brown notes that it has previously foreshadowed a debt-for-equity swap as part of any permanent capital restructuring. Any debt-for-equity swap or similar arrangement to allow Babcock & Brown to continue operating its business and selling assets as appropriate will significantly reduce the value of any existing equity.”

The company’s shares peaked at $A34.78 18 months ago but were at A32.5c when trading was halted this week.


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Attribution: Company releases, story written by Bob Dey for the Bob Dey Property Report.

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Babcock & Brown sells German portfolio

Published 24 January 2008

Babcock & Brown has signed an unconditional contract to sell €110 million of German retail property to an AIM-listed company. On completion, it will have sold 70% of the European retail portfolio on its balance sheet at the beginning of 2007.Global head of real estate Eric Lucas said: "The retail portfolio divestments since 30 June 2007 in total represent €395 million of the €750 million in ‘real estate held for sale’ earmarked for disposal in our interim result release in August 2007. The profit on these sales, the majority of which will be reflected in our 2008 results, has been in line with our original targets for these assets when acquired and illustrate the ongoing investor demand in Europe for well priced quality assets with stable rental income from high-creditworthy tenants."The sale process for the remaining portfolios on our balance sheet is proceeding well and is expected to be completed in the first half of 2008. In addition, the sale of a number of the European retail assets jointly owned with GPT is proceeding well and is also expected to be completed in the first half of 2008."In December, Babcock & Brown sold a substantial interest in the €380 million portfolio of German office & retail properties it had acquired in August. It will continue to manage & control the portfolio on behalf of the joint-venture partner, an institutional investor."The sale of an interest in the German office & retail portfolio creates a co-investment joint venture focused on German office properties which may include development where appropriate. Other equity participants may participate in future transactions."In addition, in February, Babcock & Brown will reach final close on the sale of a 94% interest in a €50 million German residential development portfolio. The sale includes a long-term asset management agreement. "These sales & a number of other smaller disposals leave the Babcock & Brown balance sheet well positioned to take advantage of opportunities in the market, especially those that arise as a result of the current dislocation in capital markets."


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Attribution: Company statement, story written by Bob Dey for this website.

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Babcock & Brown launches Australian listed residential partnership

Published 6 June 2006

International investment and advisory firm Babcock & Brown will launch an $A175 million initial public next week for a partnership investing in projects by private developers in Australia.

Babcock & Brown lodged the product disclosure statement & prospectus with the Australian Securities & Investments Commission today for Babcock & Brown Residential Land Partners stapled securities.

There will be 3 kinds of offer – foundation, broker firm & institutional – but no public offer.”All of the initial development partners have established management infrastructure in place and expertise in managing the risks associated with residential property development.”

Babcock & Brown will subscribe for 10% , the initial development partners 8%. The offer is expected to open on Tuesday 13 June.Website: Babcock & Brown

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Attribution: Company statement, story written by Bob Dey for this website.

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Babcock & Brown launches $A600 million Japanese property trust

Published: 22 February 2005

Australia-listed global investment & advisory firm Babcock & Brown has settled on an $A600 million start to its Japanese property trust, the first in Australia to invest in the Japanese real estate market.

Babcock & Brown said on 31 January it was considering the idea. Yesterday it said the Babcock & Brown Japan Property Trust would acquire an interest in a diversified portfolio of office & retail properties in the central & greater Tokyo area for Â¥47 billion ($NZ616 million).  The initial portfolio will consist of 8 office & 4 retail properties.

Eric Lucas, managing director of the manager, Babcock & Brown Japan Property Management Ltd, said future acquisitions could “provide the opportunity for creating unitholder value through redevelopment, repositioning and applying more pro-active & cost-effective asset management.”

Babcock & Brown established a joint venture with Nomura in 1986 and established its own Japanese subsidiary in 1998, when it became actively involved in property investment, financing & asset management there. Mr Lucas said this was a natural progression.

He said the vast Japanese property market had fragmented ownership, yields were attractive relative to the cost of debt funding, and increasing property turnover generated opportunities.

Japanese land prices had fallen dramatically over the past 15 years, but Mr Lucas said they were showing signs of stabilization, and growth in some areas.

Babcock & Brown has reserved 10% of the offering for itself & employees. The rest of the offer will be made to institutions & brokers. There won’t be a public offer. Trading in the units is expected top start on Monday 4 April.

Website: Babcock & Brown


Earlier story:

1 February 2005: Babcock & Brown to check out Japanese property investment


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Babcock & Brown to check out Japanese property investment

Published: 1 February 2005

Australian listed investment group Babcock & Brown said on 31 January it would start conducting market soundings on a new entity to invest in Japanese real estate.

It would be listed on the ASX and externally managed.

When Babcock & Brown issued the prospectus for its IPO last October, it indicated it was reviewing such a launch.

It said yesterday it intended to establish a number of managed investment vehicles to complement its core investment & advisory businesses.

Brokers certainly like the business, which was previously based in San Francisco. A 24 December prospectus from Babcock & Brown Capital Ltd to raise $A800 million-1 billion has been followed by a supplementary prospectus, increasing firm allocations by $A40 million to $A840 million,

Earlier stories:

17 January 2005: Babcock & Brown spends €483 million on European real estate


Website: Babcock & Brown


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Babcock & Brown spends €483 million on European real estate

Published: 17 January 2005

The Sydney-based Babcock & Brown Group announced €633 million of European real estate transactions today.

The group’s head of global real estate, Michael Maxwell, said the €483 million of purchases accelerated its strategy of quality buying income-producing assets in Europe & the UK at yields which support high levels of non-recourse borrowings. The group has also sold €150 million of more mature assets.

Babcock & Brown has agreed to buy the new 46,500m² Galerie Butovice retail & office development in Prague, for €103 million, conditional on completion by May. Dutch retailer Royal Ahold has a 15-year tenancy agreement and will also move its Central European headquarters there. Tenants have already committed to more than 90% of the property.

In German, Babcock & Brown has committed to buy 2 residential property portfolios for €380 million. The first contains 2700 apartments in western Germany & the other contains 13,500 apartments in Salzgitter, a northern German city 100km from Hamburg.

Babcock & Brown has agreed the sale of 3-quarters of its Kiel apartment portfolio for €150 million in 2 deals, 1000 units bought by a German fund in December and sale of 3600 apartments to a Scandinavian funds origination company, which went unconditional on 15 January.

Mr Maxwell said the Czech Republic & German purchases all used attractive levels of limited recourse debt finance, giving the dual benefits of enhanced running yields & strong overall internal rates of return.

Website: Babcock & Brown

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