20/08/2008 - 13:16

B&B to announce overhaul: report

20/08/2008 - 13:16

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Embattled investment group Babcock & Brown Ltd plans to announce an overhaul of its business when it reports its first half results tomorrow, as concern grows over the management of assets controlled by the B&B group.

B&B to announce overhaul: report

Embattled investment group Babcock & Brown Ltd plans to announce an overhaul of its business when it reports its first half results tomorrow, as concern grows over the management of assets controlled by the B&B group.

The Australian's online business website said the overhaul is aimed at creating a tighter corporate structure.

As well, B&B chairman Jim Babcock and chief executive Phil Green are set to step aside, although Mr Green is expected to remain as a non-executive director, the online report says.

It also says Mr Green will be replaced as chief executive by finance head Michael Larkin.

Shares in B&B were in a trading halt today after the group last night requested the suspension ahead of a meeting of a board subcommittee early tomorrow.

B&B told the stock exchange it was aware of media speculation that Mr Green could step aside.

"Media reports have suggested Mr Green could step aside as early as this week," B&B said in a statement last night.

"The company is aware of ongoing media speculation relating to management and board changes.

"While no decision has been made, a subcommittee of the company's board is meeting on the morning of Thursday 21 August 2008, when necessary information is available to them, to consider and make a decision on board changes as part of our response to corporate governance issues that have previously been raised and management changes in the context of our announced strategic review.

"The company is not in a position to release any announcement pending the result of that board subcommittee meeting."

B&B last traded at $3.45.


Meanwhile, the Western Australian Farmers Federation (Inc.) said it is extremely concerned at the implications for the State's narrow gauge rail network arising from current Babcock & Brown viability concerns, particularly given the recently deregulated wheat market.

WAFarmers President, Mike Norton, commented that one issue that farmers do not need is uncertainty over Babcock & Brown controlled WestNet Rail's ability to be adequately responsible for future track infrastructure and train control functions of the narrow gauge network.

"The importance of keeping the State's 3,600 kilometre narrow gauge rail system viable, to enable bulk grain transport to operate at its maximum potential, is essential."

WAFarmers is calling on the parties of the forthcoming State Election to announce their views on the future of the long-term lease agreement with Babcock & Brown and for the ongoing maintenance of the rail network for the future benefits of the state. The lease agreement with Babcock & Brown has some 41 years remaining.

"In particular, WAFarmers asks the parties to look at the implications of reversing the decision to permit the lease, for the future benefit of the narrow gauge network, and the state."

"Positive support for reviewing the lease and rail network maintenance will also increase the ability to keep the majority of the state's grain on rail, where it should rightfully be in terms of road serviceability, safety and carbon footprint," Mr Norton concluded.

 

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