Can we recapitalize our own loss after BBI recapitalises itself

Credit Suisse and Macquarie Capital have agreed in principle to serve as the underwriters for Babcock and Brown infrastrucure , but the final documentation will not be completed until it is clear there is adequate market support for the recapitalisation plan. Babcock & Brown Infrastructure appears likely to be in a position to update the market on its long-awaited recapitalisation deal by tomorrow or Wednesday.

The key component left to finalise is a $600 million institutional placement to be matched by a placement to the new cornerstone investor, Canada’s Brookfield Asset Management.

The group of hedge funds backed by RBS, which had proposed an alternative plan, is believed to be not taking part.

Interestingly, on Friday evening, Moody’s placed Dalrymple Bay’s Baa2 credit rating on review for a possible downgrade that would see it lose its investment-grade status. However, the downgrade is not expected to happen if the recapitalisation plan succeeds

As part of the $1.5 billion deal to erase all of BBI’s corporate-level debt, Brookfield will take a 50 per cent stake in BBI’s most prized asset, the Dalrymple Bay coal port in Queensland and will buy the debt-laden PD Ports asset in Britain. BBI, now advised byGresham, had tried to sell all or part of those assets before it decided the Brookfield recapitalisation plan was the best option.

The BBI boss’s Payrise

Jeff Kendrew was appointed chief executive officer of Babcock & Brown Infrastructure (BBI) in June 2007.

The basic wage of Babcock & Brown Infrastructure’s boss has risen by more than $300,000, despite the company’s shares losing 90 per cent of their value, according to a market analyst.

Market analysts Wise Owl’s director Sven Restel told News Limited that Mr Kendrew’s basic wage has risen from $365,000 to $700,000, while BBI shares have tanked from $2 in 2007 to less than one cent.

“It’s unbelievable what they think they can get away with,” Mr Restel said.