And finally, the market yesterday told us that it thinks Babcock and Brown is in near terminal decline after the shares fell 24% to a new record low of $3.45.
The fall came after the shares edged 6 cents higher on Monday to $4.51 after falling sharply when its affiliate, Babcock & Brown Power revealed $452 million in asset write-downs.
Babcock shares dived $1.06 to take the loss since last Friday week to a third.
So dramatic was the fall that the company asked for the shares to be suspended until Friday with board meetings today and tomorrow to discuss the results and changes in management and board positions.
It’s now widely reported that chairman Jim Babcock will retire and CEO, Phil Green will step down, but will stay with the company.
First half profit is expected to fall by 25% and 40%.
The shares are off by 90% so far this year.
Babcock & Brown Power said on Monday that it will take a non-cash charge of $410 million to its 2008 earnings to write-down the value of its Alinta retail business, in addition to a $42 million loss on the sale of the Tamar power project in Tasmania.
Babcock and Brown Power securities dropped another 7 cents or 28% yesterday to close at 18 cents. That’s basket case material if sustained.
This could get very messy tomorrow, or improve if there are sufficient changes and disclosure by Babcock and Brown.
Just how desperate things are at BNB was underlined last night by the company’s request for a trading suspension at 7 pm, three hours after trading finished for the day.
The decision was prompted by ASX queries about trhe sharp fall in the company’s share price during trading, and media speculation about Mr Green’s departure.
