B&B Power revises earnings guidance 15-May-09 by Rebecca Lawson
Babcock & Brown Power, owner of Alinta's retail assets, will realise $125 million from the release of an "onerous" contract but has revised down its operational earnings from $310 million to $270 million.
The company today said it reached conditional agreement with Origin Energy, which will assume Flinders Osborne Trading's (FOT), a wholly owned subsidiary of BBP, contracts for a nominal consideration of $1.
"At completion, expected in June 2009, a $125 million onerous contract provision will be released," BBP said.
"The novation of these contracts will have a positive effect on BBP's cash flows going forward.
"This arises as a result of the elimination of expected future losses under the contracts."
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