Babcock Infrastructure to lose €120m on Euroports stake sale(3)

Babcock & Brown Infrastructure has amended an agreement to sell a stake in its Euroports business, which will result in a €120m loss on the transaction. Antin Infrastructue Partners and Arcus European Infrastructure Fund I could ultimately acquire 40% of the company.

Babcock & Brown Infrastructure (BBI) has agreed to revise the terms of a transaction to sell a stake in Euroports.

In a statement BBI said the deal will see Antin Infrastructue Partners and Arcus European Infrastructure Fund I acquire larger stakes than originally agreed for a lower price.

Euroports: BBI
lowers its price

BBI has been reported as saying that the reduced price reflects the current market for infrastructure assets. In an attempt to raise finance, BBI is also in the process of selling PD Ports, its UK port operator, with a number of private equity bidders, including Terra Firma, thought to be interested in the company. In November BBI deferred the payment of dividends until further notice, with a payout due at the beginning of this month not declared.

Under the revised agreement, Arcus and Antin will take equity interests in Euroports of 14.1 percent and 19.9 respectively, in addition to Antin holding a convertible bond which could potentially acquire a further 5.97 percent in the company. This would result in BBI retaining a 60 percent interest in Euroports.

The price for the potential 40 percent stake has been agreed at €141.5 million, which values Euroports in its entirety at €353 million. The amended terms of the transaction will result in BBI recognising a loss on the disposal of around €120 million. The original agreement would have seen BBI selling a 29.7 percent stake.

Russell Smith, BBI’s COO of transport and Euroports’ chairman, said of the transaction: “This revised transaction represents a significant strengthening of the balance sheet at Euroports creating a strong stable company moving forward with a considerably simplified structure.”

Smith added that following the completion of the recapitalisation, refinancing and the acquisition of several minority interests in Euroports, BBI does not intend to sell down further stakes in the company.

BBI said the deal is expected to take place late this month or early August. The original agreement had been signed in December last year.

Last week a group of former Babcock infrastructure bankers completed a management buyout of the €2.2 billion Babcock & Brown European Infrastructure Fund, renaming it Arcus European Infrastructure Fund I. The acquisition of the fund, which will be led by Simon Gray and Toto Lo Bianco, received debt funding from Banco Espírito Santo de Investimento.