Wind farms power on

Independent Weekly
Friday 20/3/2009 Page: 14

The collapse of Babcock and Brown is not expected to have any major or immediate impact on South Australian assets owned by associated companies. The investment giant was placed into voluntary administration last Friday after a proposed debt restructure was rejected by investors. It owes about $3.2 billion in interest-bearing debt to local and international banks.

Babcock and Brown Wind Partners (BBW), which owns the Lake Bonney Windfarm near Millicent, still shares part of its name with the beleaguered business, but has already cut most ties with B&B. "BBW does not expect that the appointment announced by Babcock and Brown will have any material impact on the business, interests or assets of BBW," it said in a statement to the stock exchange after the finance company called in the administrators.

BBW's Lake Bonney Windfarm was officially opened by Premier Mike Rann in 2005 and has since been extended with two further stages to bring its total capacity to 240 MWs.

Rosalie Duff, head of investor relations and media for BBW, said its separation from the company began some time ago and was already well advanced. The company ended its management agreements with Babcock and Brown in December last year, and Ms Duff said its financing arrangements were "completely independent". "We are in a period where we are looking to change our name and move premises," she said.

BBW CEO Miles George also told the ABC's Lateline Business program last Friday that the new name would not include the words "Babcock and Brown". Most Babcock and Brown satellite companies have moved quickly to distance themselves from its collapse.

One of the most vulnerable is considered to be Babcock and Brown Power (BBP), which owns two coal-fired power stations at Port Augusta and the Leigh Creek coalfield. B&B owns a 9% stake in the B&B Power, which owes around $381 million to the parent company. However, BBP said the loans were on "commercial arm's-length terms" with subsidiaries of B&B, and there was no requirement to repay them upon the appointment of a voluntary administrator.

"BBP will closely monitor the situation but does not currently expect there to be any direct impact on the ongoing operations," it said in a statement. Meanwhile, administrators of Babcock and Brown have begun their investigations into the demise of a company that at its height in mid-2007 was worth $13.2 billion.

One of the key people it will be speaking to is former CEO Phil Green, who is already believed to be plotting his comeback. According to Fairfax newspapers, reports are circulating in Sydney that Mr Green plans to start afresh with a new deal-making venture - however, his unnamed financial backer has reportedly already got cold feet.