Babcock & Brown has secured an 11th-hour reprieve after a syndicate of 25 international banks agreed on Wednesday to extend a A$150m ($96m) of emergency loans to the beleaguered Australian infrastructure investor. B&B has been fighting for survival for almost two weeks after some banks in the syndicate balked at taking on more risk when the group – which already owes A$3.1bn in senior debt – said it was in danger of breaching banking covenants. It encountered particular difficulties after A$140m of its own money on deposit was withheld by HypoVereinsbank, the German unit of Italy’s Unicredit. Although syndicate members have now ”unanimously” agreed to the extra funds, not all 25 members will be extending additional credit, said insiders. B&B is also considering a debt-for-equity swap as part of a broader capital restructuring. Such a move would dilute existing shareholders, who have already seen more than 95% wiped off the group’s market value in the last year.

This entry was posted by Gwen Robinson on Thursday, December 4th, 2008 at 5:31 and is filed under Capital markets. Tagged with babcock & brown, HypoVereinsbank. Edit this entry.