Babcock might take Legal Action against Bronte Capital

Submitted by Jim Thesiger on 26 October, 2009 - 04:37

Australia based Babcock & Brown Infrastructure Group (BBI), which is engaged in the business of acquisition, management and operation of quality infrastructure assets in Australia and some other countries has warned the rebellious exchangeable preference shareholders that it might go for taking legal actions against them for the damages that the company might face if wrong information leads to a turn down of a $1.8 billion worth of recapitalisation. The company came up with the legal threat following the release of a report where a Bronte Capital Management argument was stated. Babcock & Brown Infrastructure Lawyers Freehills has issued the legal threat where it was mentioned that misleading or incorrect statements could cause considerable amount of damage to BBI and Bronte Capital and its supporters would have to take the responsibilities for the losses.

Bronte Capital Management claimed that the present offer for exchangeable preference shares of 43¢ was much lower than the 70¢ valuation conducted by BBI in June for assets attributable to EPS shareholders. Jonathan Sellar, the chief financial officer of Babcock & Brown Infrastructure stated that Bronte Capital provided wrong information in its Australian Energy Transmission and Distribution (AET&D) business valuation and BBI authority is ready to come up with their response. Mr. Sellar also added that Babcock & Brown is determined to make sure that all the information that are being published are correct.

In order to accomplish the complicated recapitalisation deal, more than 75 percent of the EPS holders and more than 50 percent of the ordinary shareholders are needed to vote in favour of the agreement. The voting is expected to be held at a meeting on 16th of November. It is to be mentioned that earlier this week Bronte Capital Management delivered a legal letter in an attempt to set up the BBI EPS debt holders ranking based on the AET&D assets.