BBI to Sell Stake in Euroports at a Loss

Babcock & Brown Infrastructure on July 28 said it will book a pretax loss of around $170 million after agreeing to sell a bigger stake in its Euroports unit at a lower price.

Instead of disposing of a 29.7 percent stake in Euroports as originally agreed in December, the Australian investment fund will sell up to 40 percent of one of Europe's biggest bulk and breakbulk stevedores.

BBI will receive around $200 million, valuing Luxembourg-based Euroports at just over $500 million, down from an implied value of $570 million when the sale was first announced.

Under the amended sale agreement, Arcus Infrastructure Fund and Antin IP will hold equity interests in Euroports of 14.1 percent and 19.9 percent, respectively.

In addition, Antin IP will hold a convertible bond in Euroports, which if converted will give it a further 5.97 percent of the equity, leaving BBI holding a 60 percent stake.

Sydney-based BBI said it hopes to complete the transaction in late July or early August.

The shareholders have also agreed to a further capitalization of Euroports, which handles around 70 million metric tons of cargo annually at 20 terminals in 15 ports across continental Europe.

The revised sale agreement also includes a share equalization process for 2012 and 2013 so that, depending on Euroports' performance, the stake held by Arcus and Antin could be amended to between 34 percent and 60 percent.

Euroports also will acquire full ownership of two key joint ventures, Benelux Port Holdings, which operates terminals in Antwerp, and BBI Port Acquisitions Luxembourg, which owns a facility in Spain and in Antwerp.

"This revised transaction represents a significant strengthening of the balance sheet at Euroports, creating a strong stable company moving forward with a considerably simplified structure," said Russel Smith, BBI chief operating officer transport and chairman of Euroports.

"Having completed the recapitalization, refinancing and the acquisition of a number of the minority interests, BBI has no plans to sell down any further stake in Euroports," Smith said.

Euroports operates bulk and breakbulk cargo terminals in Belgium, Bulgaria, France, Finland, Spain, Italy and Germany.

Contact Bruce Barnard at brucebarnard47@hotmail.com.