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Babcock shares double after $150m lifeline

Posted December 4, 2008 15:13:00
Updated December 4, 2008 15:51:00

Price surge...but Babcock's shares peaked at $35 in June. (www.babcockbrown.com)

Shares in troubled investment bank Babcock and Brown have more than doubled in early trade after its bankers lent it more money to prevent the company from collapsing.

The debt-laden investment bank has been thrown another lifeline, with its 25 Australian and foreign banks deciding to lend it an extra $150 million.

Babcock and Brown needed the money to stay afloat after one of its foreign lenders refused to release a deposit and the company suspended its shares from trading while it had discussions.

The company says it will come up with a new long-term plan to restructure its finances by February and plans to sell assets and cut jobs to pay off debt.

The company owes its lenders more than $3 billion.

In early trade, its shares more than doubled to 57 cents.

Its shares reached a high of nearly $35 in June last year.

At around 2:30 AEDT, Babcock and Brown shares were up 92 per cent or 24 cents to 48 cents.

Tags: business-economics-and-finance, banking, finance-markets, international-financial-crisis, australia