LONDON — Babcock & Brown Infrastructure, one of Europe’s biggest port operators, said the bankruptcy of Babcock and Brown, Australia’s second-largest investment bank, would not impact its business.
Sydney-based Babcock and Brown, the legal controlling shareholder of BBI, on March 13 applied for voluntary administration after a group of New Zealand creditors voted down a debt restructuring plan.
BBI, which has 20 bulk and breakbulk cargo terminals in 15 ports across Europe and owns PD Ports of the United Kingdom, moved immediately to distance itself from its former parent as it negotiates the sale of stakes in its port businesses.
BBI Managing Director Jeff Kendrew said the bankruptcy proceedings would have no immediate impact on BBI’s day-to-day business.
“We do not expect the appointment of Babcock and Brown administrators to have any direct effect on BBI’s asset sales process, its business or its operations,” he said in a statement. “BBI’s asset sale process is continuing and will not be affected by any of the changes announced by Babcock and Brown today.”
BBI is currently finalizing the $155 million sale of a 29.7 percent stake in Euroports, its Luxembourg-based European ports arm, to two investment funds, and due diligence for a further stake sale is under way.
BBI said it is “looking ultimately to sell down to a residual holding of between 25 percent and 50 percent.”
Euroports handles over 70 million tonnes of cargo annually and has 2,700 employees at terminals in Bulgaria, Italy, Finland, Spain, France and Germany as well as two stevedores in the port of Antwerp.
BBI originally intended to create the first global bulk and break bulk port company to mirror international container terminal operators like Hong Kong’s Hutchison Ports and Dubai’s DP Ports.
Due diligence has begun in BBI’s Dalrymple Bay terminal, Australia’s second largest coal export facility, with the end of the second quarter set as the closing date for offers. BBI has said it would prefer to sell a 49 percent stake but if the price is right it is open to disposing of its entire holding.
BBI also is in talks to sell all or part of PD Ports after receiving several unsolicited offers for the company which it acquired for around $1.2 billion in 2006.
PD Ports main asset is Teesport, one of the United Kingdom’s largest bulk ports, which recently unveiled a $500 million investment to build a 1.8 million TEUs-a-year container terminal. The company has delayed the start of construction by a year to the second quarter of 2010 following the slump in container traffic.
BBI has built up a 22 percent stake in Forth Ports, the United Kingdom’s last publicly quoted ports operator, fuelling speculation it plans a full takeover.
In the US, Babcock & Brown Infrastructure Fund North America owns ICS Logistics, which has stevedoring operations in Jacksonville, Mobile, Ala., Port of Tampa and Port Manatee, Fla. BBIFNA is a San Francisco-based unlisted infrastructure fund that owns and manages infrastructure assets throughout North America.