This article is from the Australian Property Journal archive
GPT last Friday said its $6.2 billion joint venture with Babcock & Brown will not be impacted by the collapse of investment bank.
Last week, Babcock & Brown announced that investors in the company’s subordinated notes listed in New Zealand have voted against the special resolution to restructure the terms of the notes and as a result the board has appointed David Lombe and Simon Cathro of Deloitte Touche Tohmatsu as voluntary administrators.
Babcock & Brown said the appointment of administrators is not expected to have any material impact Babcock & Brown International Pty Ltd the main operating and asset owning entity of the Babcock & Brown Group.
BBIPL will continue to operate and will proceed with the orderly realisation of assets over an approximate 2-3 year time horizon to reduce debt.
Babcock & Brown said there will be value for BBIPL’s corporate facility lenders but it does not believe that there will be any value for equity holders, and holders of the company’s subordinated notes following the completion of the BBIPL asset sale program.
BBIPL is a joint venture partner of GPT which has a portfolio of assets valued at $6.2 billion. GPT’s current investment represents $1.2 billion of preferred capital.
GPT reiterated its intention to exit the JV which is expected to begin a formal three year realisation period from December 2009.
Meanwhile the Babcock & Brown Residential Land Partners and Babcock & Brown Japan Property Trust have also said they will not be affected.
BLP said it has been in discussions regarding its existing loan facilities including the amounts owing to the Babcock & Brown Group. Those amounts are owed to Babcock & Brown Financial Services Pty Ltd and Babcock & Brown Australia Real Estate Management Pty Ltd.
BJT reaffirmed that it is currently in discussions with Babcock & Brown regarding a potential transaction involving the management rights to BJT.
“Discussions with Babcock & Brown are continuing constructively and an announcement regarding the outcome of these discussions is expected shortly. Babcock & Brown have confirmed that the voluntary administration does not affect these discussions,” BJT said.
Australian Property Journal
