International investment and specialised fund and asset management group Babcock & Brown Ltd (BNB) said it has increased its exposure to troubled stockbroking firm Tricom.
Babcock & Brown has increased its existing exposure of $35 million to a maximum of $40 million through underwriting a further $5 million of additional funding.
The company said the maximum exposure has already been reduced to $37.5 million.
“Babcock & Brown’s total exposure remains secured and no further capital injection by Babcock & Brown is contemplated following the recapitalisation,” the company said.
The recapitalisation takes the form of new equity from parties other than Babcock & Brown and a standstill agreement from Tricom’s secured lenders ANZ and Babcock & Brown.
Babcock & Brown said it is participating in the recapitalisation to protect Babcock & Brown’s exposure and to ensure an orderly rundown of the balance of Tricom’s securities loan book. This will in turn facilitate the best possible outcome for Tricom’s clients and ensure that market trading in the companies represented in the book is conducted in an orderly fashion in the normal course of business.
Shares in BNB traded between $13.30 and $13.98 during the day. Volume of 2.7 million had changed hands, which is slightly down on the daily average volume, suggesting investors are staying clear of the stock until they interpret the news.
Shares closed 10 cents down at $13.60. This is far from the height it reached in July of $34.78.
