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Australian investment firm Babcock & Brown has not yet received a response from its lenders on its plan to repay debt, the company said on Monday while requesting a suspension of trading in its shares.
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The group, which last week said its net assets were worth less than its debt and equity, said it was still talking with its creditors on its proposals to repay A$150 million (US$106 million) in short-term debt coming due at the end of 2009.
"The fact they are still in discussions means that at least there is a moderate to high interest in continuing to operate the businesses," said Angus Gluskie, portfolio manager at White Funds Management said.
The plan includes a possible debt-for-equity swap.
Babcock, a company once worth around $6.5 billion, has seen its market value crumble to around A$120 million, after the global credit crunch sparked a crisis of confidence in its debt-funded expansion model.
Its shares, peaking at about A$35 in June 2007, closed at A$0.32 before its shares were placed on trading halt last week.
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Babcock requested a suspension of trading in its shares on Monday pending a further announcement on the outcome of talks with its creditors, which it expected to be during the week of Jan. 26
In a bid to raise capital and restructure the business, the group is trying to sell more than half its asset base, including real estate, leasing and corporate and structured finance businesses, to focus on infrastructure investments.
On Monday, one of its funds under management, Babcock & Brown Power said it had signed an agreement to sell some of its assets to Aurora Energy, generating about A$15 million.
Babcock's lenders threw it a A$150 million lifeline in December while it worked on a plan to pay down A$3 billion in debt maturing by 2011.
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