PD Ports to sell for a song

Babcock & Brown Infrastructure (BBI) has signed an agreement with Canadian investors that would see PD Ports sold for a nominal A$1.00 (US$0.90). 

The deal would see Brookfield Asset Management and Brookfield Infrastructure Partners jointly sponsor a comprehensive restructuring recapitalisation of embattled BBI and take direct control of PD Ports, owner of the port of Teesport in the UK. 

Canada-based Brookfield has subscribed for a proposed investment in stapled securities and assets of BBI of around US$1.1bn. The investment comprises the purchase of A$625m-$713m (US$555m-635m) of stapled securities for a 35-40% interest in the restructured BBI. 

An additional investment of A$295m would see the direct purchase from BBI of 100% of PD Ports and a 49.9% interest in Australia’s Dalrymple Bay Coal Terminal (DBCT). Immediately following the purchase of PD Ports, Brookfield would repay £100m (US$160m) of debt at PD Ports. 

Subject to approval by security holders and any necessary regulatory and government bodies, the deal is expected to be completed in late November. 

PD Ports wants to press ahead with the development of its proposed £330m, 1.5m teu Northern Gateway container terminal project, which has already been pushed back.