Australian investment bank Babcock and Brown has asked for trading in its shares to be suspended, as it continues to await word from its bankers on a business plan to escape insolvency.
Babcock requested the suspension from the ASX this morning. There is no indication of how long
the suspension might last or when the banks will respond to the business plan.
Babcock shares have been in a trading halt on the ASX since last Thursday, after it submitted its revised business plan to the 25-bank syndicate of financiers.
A partial response to the plan, detailing how Babcock and Brown will repay a A$150 ($180.39) million loan secured on December 5 and restructure its balance sheet, had been expected on Thursday, then on Friday, with a complete response expected by market open on Monday.
The firm also has to pay down corporate debt of A$2.8 billion and A$6.4 billion of limited recourse debt.
The banks' verdict on the revised business plan will determine whether Babcock and Brown has been saved from insolvency.
The banking syndicate is dominated by European institutions, with Australia's four major banks holding aggregate exposure estimated around A$800 million.
Thursday's trading halt follows Babcock and Brown's warning on Wednesday that a capital restructure would significantly dilute existing shareholders' equity.
The firm said on Wednesday that its books would show a "substantial negative net asset position" as at December 31, when it reports its full year results, scheduled for February 26.
- AAP
