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.
