BBW raises $120m

Bendigo Advertiser, Page: 33
Thursday, 11 May 2006

MELBOURNE - Babcock & Brown Wind Partners (BBW) is raising $120 million to fund a fresh round of wind farm acquisitions in the US. The investment firm went into a trading halt yesterday as it started the bookbuild on a placement to institutional investors it says will be equal in size to about 15 per cent of its existing share capital. In February this year BBW said the majority of its $227 million cash balance had been reserved for identified projects and acquisitions.

However, since then new opportunities to take up stakes in wind farms in the US have appeared on the company's investment horizon, prompting the new share placement. Of the money raised, $50 million will go towards an unnamed potential acquisition in the United States, which it says has operating capacity of up to 54 megawatts. Another $22 million will be spent on buying up the remaining 20 per cent of the company's existing investments in what it calls its "03-04" assets in the US, boosting its stake to 100 per cent. These projects include stages one and two of the Sweetwater wind farm project in Texas, the Caprock business in New Mexico, Blue Canyon in Oklahomaand Combine Hills in Oregon.

A further $45 million will go towards buying up 37.5 per cent of what BBW calls its "05" assets in the US, again boosting BBW's stake to 100 per cent. These assets include stage three of the Sweetwater project, the Kumeyaay wind farm in California, Bear Creek in Pennsylvania and Jersey Atlantic in New Jersey. The new acquisitions will add to the series of purchases BBW has made in Europe and the US since listing in October last year.

"In the short time sincelisting we have improved the portfolio with a number of excellent acquisitions," BBW chief executive Peter O'Connell said yesterday. BBW says the latest round of purchases will see it exceed earnings forecasts and should contribute about $22 million to net operating cash flows in the 2006-07 financial year. The investment firm has confirmed its distribution guidance of 10.2 cents per security for 2005-06 and says distributions for 2006-07 will be at least 11.2 cents per security.

The bookbuild is expected to be completed by tomorrow with securities issued at between $1.50 and $1.60.BBW remains on a trading halt, having last traded on Tuesday night at $1.55.