PD Ports operation to be sold to Toronto firm for US$0.90

AUSTRALIA's Babcock & Brown Infrastructure (BBI), owner of north east England's PD Ports, is to sell its much-promoted port operation for one Australian dollar (US$0.90) to Toronto institutional investment firm Brookfield Asset Management.

After troubled BBI rejected a refinancing deal from the Royal Bank of Scotland, it accepted a proposal from the Canadian firm, which will invest US$1.1 billion for a 35-40 per cent share in the Australian company at the same time taking 49.9 per cent of Darymple Bay Coal Terminal and 100 per cent of PD Ports.

Sydney-based BBI has debts totalling A$8.9 billion, (US$8.05 billion) with an A$300 million due in February, which it had hoped to pay through an asset sale of assets, including PD Ports, reported the UK's International Freighting Weekly. But the money could not come in fast enough to meet the February deadline, and might well prompt demands for immediate payment, BBI said.

If the deal is ratified by BBI shareholders, the new PD Ports owner will immediately repay GBP100 million (US$479.4 million) of its GBP300 million debt.

Brookfield has more than US$80 billion of property, renewable power and infrastructure assets, but has little experience in European port operations.

Cargo throughput at Teesport and Hartlepool fell 33 per cent year on year in the second quarter, against a nation-wide decline of 13 per cent.

"Trading has been adversely affected by the credit crunch - particularly ports with a heavy reliance on container volumes," said Paul Mankin, head of the corporate finance team at PricewaterhouseCoopers.

(Source: www.schednet.com)