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BBI wins recap nod
STUART WASHINGTON
November 16, 2009 - 1:46PM

The $1.8 billion recapitalisation of Babcock & Brown Infrastructure will almost certainly go ahead after two classes of security holders voted their proxies overwhelmingly in favour of the deal.

The formal result is unlikely to be known until later this afternoon.

Results of proxy voting presented to two separate meetings indicated the contentious proposal - which reduces current shareholders’ stakes to a meaningless level - would be comfortably approved.

This morning at a meeting of ordinary shareholders in Babcock & Brown Infrastructure more than 80 per cent of proxies voted for the proposal - above the threshhold of 50 per cent of votes cast necessary for approval.

This afternoon at a meeting of BBI Exchangeable Preference Shares, the combined vote of proxy holders and proxies directed by the chairman, David Hamill, amounted to about 80 per cent - above the threshhold of 75 per cent of votes necessary required for approval.

At the morning meeting shareholders expressed their distress that the proposal would effectively wipe them out, when shares were consolidated on a 15,000-for-one basis.

Shareholders with less than 15,000 shares currently will not receive a single share for their stake, although their current stake entitles them to a 4 cent a share dividend designed as compensation for their massive dilution.

At both meetings, Mr Hamill warned that the alternative of not embracing the recapitalisation proposal would leave the company facing voluntary administration and the potential for investors to receive nothing.

Under the recapitalisation proposal, Canadian investor Brookfield Asset Management will take a 35 per cent stake, institutional investors will take a 35 per cent stake, a shareholder purchase plan will account for 14 per cent and BBI EPS shareholders will own about 15 per cent.

Less than 1 per cent of the company will be owned by existing shareholders through their existing stakes.

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SMH