Babcock consults lenders after week of share turmoil

My Account
Logout

Create an Evening Standard Account

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Welcome! Sign in here

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Forgot your password ?

Registration

* indicates fields that are mandatory

Email *

Password *

Confirm Password *

First name *

Surname *

Postcode *

Country *

Mobile phone number

Username *

Gender *

Year of birth *

When you sign up...

You will have access to all our online competitions, discounted offers and can post comments on our site.

You will also receive The Weekender newsletter sent every Thursday - it’s full of fantastic offers and ideas for the weekend. You can update your email preferences in your account page when you log in.

Other newsletters and emails

Homes & Property Newsletter - Yes I want to receive the weekly email with all the latest news on property in the capital

Occasionally we would also like to send you relevant emails detailing specific offers either from ourselves or carefully selected partners. If you would prefer not to receive these then please tick the appropriate boxes below. We will never pass on your details.

I do not want to receive additional offers and information from the Evening Standard

I do not want to receive additional offers and information sent by Evening Standard on behalf of carefully selected partners

Terms and Conditions

* I have read, understood and agree to be bound by the terms and conditions of Evening Standard

Registration

Mail Sent for Registration Confirmation.

A confirmation email has been sent. Please activate your account by clicking on the activation link sent in your mail box.

Babcock & Brown announced on Friday what was the first large debt-financed takeover of a major infrastructure asset since the credit crunch started to bite. But rather than welcoming the deal, its shares continued a plunge that started even before the deal was announced. By the close of play, it had lost half its market value in just one week.

The share slide was so extreme that Babcock's lenders now have the right to insist on new terms for its three-year A$2.8 billion (£1.35 billion) debt facility.

City dealmakers are intently watching the fate of Sydney-based Babcock, which is seen as a marker of how investors view leveraged takeovers.

Today, Babcock said it would accelerate a "strategic review" of its listed funds - generally coded language for a sale of some assets.

The company also said it would be receiving takeover offers this week for its wind farm assets in the UK and Europe. Babcock is expected to receive bids from bigger Australian rival Macquarie in that auction. Babcock's business model has been stretched by the difficulty of obtaining credit to fund big takeovers.

Shaw Stockbroking analyst Jamie Spiteri said: "There is no confidence out there at the moment." The shares edged up in Sydney today.

For RBS, the sale of Angel Trains was a crucial part of a restructuring that included a £12 billion rights issue.

The train-leasing company includes Virgin's Pendolino tilting trains out of Euston and the rolling stock ferrying commuters in to and out of Waterloo.

It is not thought that deal is yet in jeopardy. When Babcock announced it last week, it said it had raised £2.8 billion of long-term financing for the deal.