Hi...

Hi again,

http://www.businessspectator.com.au/bs.nsf/Article/THE-DISTILLERY-Milking-the-system-pd20091123-Y2TX5?OpenDocument&src=sph

The rationalisation of the LPT sector is also the subject of The Australian Financial Review’s Due Diligence column. According to the piece, the resurrection of Babcock and Brown Infrastructure as Prime Infrastructure Holdings “is proof that BBI owned lucrative assets ... the problem is the debt foisted onto the business by BBI’s external manager, Babcock and Brown.” The story goes on describe Prime as a “cautious infrastructure company ... with almost halved debt as a multiple of its earnings.” This is all welcome for shareholders. However, for this column the fundamental questions about how the LPT model went so far astray remain. The AFR story quotes BBI chairman David Hamill, who was, apparently, “never a fan of the externally managed model”. Yet the fact that it is Hamill – a former Queensland treasurer – making the statement raises interesting questions as to how such models gained regulatory approval in the first place. Following the sale of Dalrymple Bay to BBI in 2001, Hamill joined the BBI board in 2002. He became chairman in 2008. This column has to ask why, if he was so opposed to the external management model, did he put in motion selling Queensland government assets to one, then join and ultimately run it? If investors believe Hamill, then this column has a bridge it will sell them.

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