Bruce Barnard | Sep 22, 2009 9:10AM EDT
Babcock & Brown Infrastructure, the heavily indebted parent of leading bulk/break-bulk stevedore Euroports, is weighing two rival rescue offers.
The Australian investment company said it is assessing whether an alternative refinancing proposal from a group of international hedge funds is superior to an existing offer from an unidentified potential "cornerstone" equity investor.
BBI, which also owns the UK's PD Ports, halted trading in its shares for the second time this month last Friday to gain time to consider the new refinancing offer from the hedge funds. The Royal Bank of Scotland is managing the offer.
Sydney-based BBI said it has "a number of concerns as to whether legally and commercially the proposal submitted by RBS can be executed."
BBI said it is also concerned over the certainty and timing of the deal given its debt repayment schedule -- it has $178 million of unsecured debt due in October and a further $261 million due in February.
The hedge funds offered to repay BBI's corporate debt with $522 million of new bonds, a $305 million loan, and $348 million of new equity, BBI said.
The cornerstone investor, said to be Canada's Brookfield Asset Management, reportedly has offered to invest $522 million in BBI and buy a 50 percent stake in its prize asset, Australia's Dalrymple Bay terminal, the world's third largest coal export shipping facility.
BBI also is awaiting offers for PD Ports, the owner of Teesport, one of the UK's biggest bulk ports. The company's original $720 million price is said to have been cut to around $480 million to reflect the slump in world seaborne trade.
Earlier, BBI booked a $170 million loss on the sale of a 40 percent stake in Euroports. It retains 60 percent of the Luxembourg-based group which handles around 70 million metric tons of bulk and break bulk cargoes annually at 20 terminals in seven European countries.
Contact Bruce Barnard at brucebarnard47@hotmail.com.
