Infrastructure company Babcock & Brown Infrastructure Group
(ASX:BBI) says it has reached an interim agreement with a potential cornerstone investor who may help to reduce its burdening debt.
Babcock & Brown Infrastructure has $9.1 billion in total proportionate debt and $1.2 billion in corporate level debt facilities as at June 30 2009, and is seeking a potential cornerstone investor to participate in a comprehensive equity recapitalisation transaction.
The company says in recognition of the time and cost commitment required by the potential investor it has entered into an interim agreement to negotiate in good faith.
The agreement includes a non-solicitation obligation on Babcock & Brown Infrastructure Group, a capped cost reimbursement provision in favour of the potential investor and a three month right of first refusal over the sale of certain assets if the company chooses to seek to sell those assets.
The company says the process of finalising transaction terms could take several weeks and there is no assurance that agreement will be reached in relation to any transaction.
The company has requested its shares remain in a trading halt as it continues these talks but this has been refused. Babcock & Brown Infrastructure Group posted a loss in 2008 after a profit the year before.
Port and rail company Asciano Group (ASX:AIO) is to appoint three new non-executive directors to its board with one of them to become the company’s new chairman.
The new directors Malcolm Broomhead, Dr Bob Edgar and Geoff Kleemann will be formally appointed at Asciano’s next board meeting on September 22.
Mr Broomhead was managing director and CEO of Orica from 2001 to September 2005.
Dr Bob Edgar recently retired from a 25 year career at ANZ, where his most recent role was as deputy CEO.
And Mr Kleemann is a former chief financial officer at Crown.
Mr Broomhead will takeover from Tim Poole as chairman after he steps down from the board of directors following the company’s annual general meeting on October 23.
Mr Poole says these board changes together with the recently announced senior management changes and recently completed capital raising place the group in a strong position and enhance an already very positive outlook. Asciano Group’s 2009 net profit took a big tumble from its previous result.
Office products supplier Corporate Express Australia Ltd (ASX:CXP) has reported an 8.8 per cent fall in first half net profit and says it expects the year to remain challenging.
Net profit after tax for the six months to July 31 came to $25.5 million, down from $27.94 million the year before. Revenue fell six per cent to $599.2 million.
Corporate Express says it expects conditions to remain challenging for at least the remainder of the year and expects the market for office products to remain highly competitive in the second half.
The company says it is on track to achieve earnings before interest and tax at the lower end of analysts forecasts of between $90.9 million to $100.5 million for the fiscal year ending January 2010.
The company says the impact of refinancing debt early to provide funding certainty means that interest expenses will increase by around $2.5 million this financial year.
Corporate Express declared an interim dividend of 10 cents a share. Corporate Express Australia’s 2009 net profit was $63.09 million.
