Babcock & Brown Bosses Seek Buyout Funds

LONDON (Reuters) – Management teams at collapsed Australian-listed infrastructure investor Babcock & Brown (BNB.AX) are seeking finance for management buyouts, according to newspaper reports on Sunday.

Antonino Lo Bianco, Babcock’s European head of infrastructure, is believed to be seeking backing to buy its European infrastructure and wind farm funds, the Independent on Sunday cited a source close to him as saying.

Bosses of the group’s British division, Babcock & Brown Public Partnerships Ltd (BBPP), which specialises in private finance initiative (PFI) projects, are interested in buying a management contract under which they receive investment advice.

The move would mean the 30-strong portfolio management team providing the advice would keep their jobs by moving into BBPP, a source close to BBPP said.

The UK division is in funding talks about such a deal and hopes to conclude it shortly, the Financial Sunday Express reported.

BBPP issued a statement on Friday saying it did not expect the administration of its parent company to affect it.

“Babcock & Brown Ltd (BBL) is a holding entity only and the administration does not extend to the main operating company in the Babcock & Brown Group, to any of BBL’s other subsidiaries or to the company’s investment advisor,” the statement said.

“Current performance is satisfactory and the company’s portfolio continues to perform as anticipated.”

In the UK, BBPP has interests in sectors including roads and tunnels, rail, schools, courthouses, police and custodial facilities.

On Friday, a small group of foreign creditors took control of Babcock & Brown after voting down a rescue plan and putting themselves in a position to fight for a share of $9 billion in group assets.

A meeting of New Zealand bondholders rejected the plan, which would have paid them just one tenth of a cent in every dollar, in a move that forced the company to appoint administrators, who are obliged to run the firm for the bondholders.

(Reporting by Philip Waller; Editing by David Holmes)