Yesterday morning there was Babcock & Brown Infrastructure also making an announcement which confirmed a 7.5c distribution will be paid on September 15, lifting annual payout to 15c.
BBI recovered 5c to 92.5c – still an unsustainable 16% dividend yield — but with almost $10 billion of debt and a market capitalisation that fell below $2 billion last week, you now have to ask if Transurban can make such a dramatic move. Why not BBI, which plans to distribute $356 million this financial year.
Incidentally, BBI has appointed former Queensland Treasurer David Hamill as acting independent chairman, replacing Babcock CEO Phil Green. Babcock & Brown owns 8.24% of BBI.
Babcock and Brown rose 1c to $6.89 at one stage, but then tumbled 18c to $6.70 on the late downgrade of BBP.
Babcock and Brown Infrastructure (BBI) also revealed it had started a sweeping strategy review in addition to the David Hamill appointment.
The actual distribution will be confirmed following a review of BBI’s financial statements for fiscal 2008 expected on August 26, BBI said.
BBI said it had decided to undertake a review of its capital management policies, which will include sales of non-core assets, gearing levels and distribution policy.
A progress report will be provided to investors at the release of BBI’s annual results in late August, the fund said.
BBI’s assets include the Dalrymple Bay Coal Terminal in Queensland, trans-Tasman energy business Powerco, US transmission cable Cross Sound Cable, Western Australian rail infrastructure firm WestNet Rail, UK port asset PD Ports, a suite of European concessional ports, and UK natural gas distributor EIG.
”A capital management review has been initiated by the BBI board in order to ensure we continue to have a strong balance sheet with the capacity to fund attractive organic growth opportunities.”
And Babcock & Brown Wind Partners will provide an estimated distribution for the six month period ending 30 June 2008 of 7.25c per stapled security.
This distribution will be the final distribution for the period ending June 30.
The announcement brings the total distribution for the 12 month period ending June 30 to 14.5c per stapled security, in line with distribution guidance previously provided.
The actual final distribution will be confirmed following the announcement of BBW’s full year financial results on or about August 28.
BBW said its distribution reinvestment plan will be in operation for the 2008 final distribution. That will be a real test of investor faith.
BBW securities rose 7c to $1.72.
And B&B’s listed retirement and aged-care homes fund, revealed its final distribution for its 2008 year would be cut in half to just 2.1c a security, making a total payout of 6.3c as opposed to 8.4c: that’s a 25% cut. Ouch.
And, surprise surprise Centro Properties says it won’t be paying a distribution to ordinary security holders for the June 30 its second half, because it has incurred what it terms significant refinancing and adviser fees.
"CPT Manager Ltd, as responsible entity for the Centro Property Trust and Centro Properties Ltd (Centro), will not be paying a distribution to ordinary securityholders for the six months ended 30 June 2008,” CPT said.
CPT said that under the terms of troubled shopping centre group’s constitution, an amount equivalent to the trust’s taxable income was required to be distributed, but no taxable income was forecast for 2007/08.
"While Centro expects to record an operating distributable profit for the year, it has incurred significant non-operating refinancing and adviser fees,” CPT said.” In addition, Centro’s financial arrangements are such that it is not in a position to fund a distribution.”
Its listed retail trust Centro Retail (CER) said in a statement it expects to make a distribution of about 1.4 cents per stapled security to securityholders for the second half of 2007-08.
Centro MCS Manager, the trust’s responsible entity, said the distribution equated to about $32 million, the estimated taxable income of the trust.
Under the constitution of Centro Retail Trust, it is required to distribute its taxable income.
Centro Properties, which has more than $8.5 billion of syndicated funds under management, hit the wall in December after it announced it was struggling with the debt on its property portfolio spanning Australia, New Zealand and the US.
Its share price has since tumbled 80% and finished at 27 cents yesterday, down a cent. The retail trust added 5 cents to 39.5 cents.
Earlier this month the shopping centres owner was granted more time to repay about $2.8 billion of debt owed to its lenders.
The deadline for the repayment of $2.3 billion owed to its Australian lending group and $US450 million (about $472 million) to US private placement noteholders was extended by almost seven months to December 15, from May 30.
The extension will allow Centro to continue talks on asset sales to raise funds to repay the debt.
