ID :
33323
Mon, 12/01/2008 - 20:06
Auther :
Shortlink :
http://m.oananews.org//node/33323
The shortlink copeid
B&B seek extension to trading suspension
Babcock & Brown Ltd (B&B) has extended a suspension on the trading of its shares, as speculation mounts that the loss-making German unit of UniCredit Group, HypoVereinsbank (HVB), is not ready to commit to a $200 million injection to the investment firm.
B&B is trying to arrange the facility to cover a disputed deposit, which has been
withheld by one of its banks, believed to be HVB.
"It is expected that the suspension will end when B&B is in a position to make a
further announcement in relation to those discussions and negotiations, which is
expected to be by Wednesday," B&B said in a statement on Monday.
Media reports say HVB has frozen as much $140 million worth of deposits held on
behalf of B&B against B&B's debt owing to HVB.
A report on The Australian Online on Monday said two European banks were not ready
to commit to a $200 million rescue plan for B&B so that it could progress with asset
sales.
B&B refused to confirm the identity of the institution that had frozen the deposit.
Sources said the 25-member banking syndicate was dominated by European banks, with
local involvement confined to Australia's four major banks whose aggregate exposure
is estimated to be around $800 million.
Two US banks and two Asian-based banks are also involved, sources said.
Collectively, the banking syndicate has lent B&B $2.8 billion.
Düsseldorf-based WestLB AG last week told AAP it was playing a "very minor" role in
the consortium.
HVB did not respond to enquiries.
HVB posted a net loss of Euro 258 million ($A502.87 million) for the nine months to
September 30, 2008 on Euro 361 million ($A703.64 million) of net writedowns on
loans and provisions for guarantees and commitments, according to a presentation to
investors last month.
Shareholders equity was "burdened by negative fair-value fluctuations of equity
interests such as with the participation in Babcock and Brown," HVB said.
Trading in B&B shares has been suspended since November 20, when news of the dispute
first emerged.
B&B shares last traded at 25 cents.
B&B is trying to arrange the facility to cover a disputed deposit, which has been
withheld by one of its banks, believed to be HVB.
"It is expected that the suspension will end when B&B is in a position to make a
further announcement in relation to those discussions and negotiations, which is
expected to be by Wednesday," B&B said in a statement on Monday.
Media reports say HVB has frozen as much $140 million worth of deposits held on
behalf of B&B against B&B's debt owing to HVB.
A report on The Australian Online on Monday said two European banks were not ready
to commit to a $200 million rescue plan for B&B so that it could progress with asset
sales.
B&B refused to confirm the identity of the institution that had frozen the deposit.
Sources said the 25-member banking syndicate was dominated by European banks, with
local involvement confined to Australia's four major banks whose aggregate exposure
is estimated to be around $800 million.
Two US banks and two Asian-based banks are also involved, sources said.
Collectively, the banking syndicate has lent B&B $2.8 billion.
Düsseldorf-based WestLB AG last week told AAP it was playing a "very minor" role in
the consortium.
HVB did not respond to enquiries.
HVB posted a net loss of Euro 258 million ($A502.87 million) for the nine months to
September 30, 2008 on Euro 361 million ($A703.64 million) of net writedowns on
loans and provisions for guarantees and commitments, according to a presentation to
investors last month.
Shareholders equity was "burdened by negative fair-value fluctuations of equity
interests such as with the participation in Babcock and Brown," HVB said.
Trading in B&B shares has been suspended since November 20, when news of the dispute
first emerged.
B&B shares last traded at 25 cents.
