ASX Release
1 March 2007
CAPITAL RAISING: STRONG DEMAND SEES PLACEMENT OVERSUBSCRIBED Babcock & Brown Infrastructure (BBI) today announced the successful completion of the institutional placement launched on Tuesday 27 February 2007. In response to strong demand from domestic and international institutional investors the oversubscription was exercised resulting in the full placement capacity of 234.5 million securities being utilised. The price of new securities to be issued under the placement is $1.80 per stapled security. The placement has raised $422.1 million. This is $97.1 million (29.9%) above the $325 million target provided for in BBI’s funding forecast1. In addition to this amount, Babcock & Brown have made a commitment to subscribe for approximately $15 million (or 8.3 million stapled securities) at the price of $1.80 per stapled security. This commitment was outlined in the original results and placement announcement by BBI. This subscription will be conditional upon the approval of BBI stapled security holders at an Extraordinary General Meeting to be held as soon as practicable. Security holders will be sent a Notice of Meeting in due course, with details of the meeting and the resolutions to be considered. The funds raised in the placement are intended to be applied towards the acquisition of NorthWestern Energy (NorthWestern). The acquisition of NorthWestern is subject to various conditions precedent including the receipt of all necessary federal and state regulatory approvals. Six of the seven such approvals have been received, with only the approval of the Montana Public Service Commission (MPSC) outstanding. It is assumed that the acquisition of NorthWestern will be completed by 1 July 2007. If NorthWestern does not receive regulatory approval, the funds will be applied towards other near term growth opportunities, including the expansion of Dalrymple Bay Coal Terminal (DBCT) and other bolt-on acquisitions. Placement The placement was undertaken via an institutional bookbuild which was concluded on Wednesday 28th February. There was strong domestic and international demand from both existing shareholders and new institutional investors. The placement has also resulted in a number of new high quality institutional investors being added to BBI’s register.
1
Slide 13 of Half Year Results to 31 December 2006 and Placement presentation, 27 February 2007.
Settlement of the new securities issued under the placement will occur on Wednesday 7 March 2007 with quotation and normal trading expected from Thursday 8 March 2007. All new securities issued will be entitled to the full distribution in respect of the six month period to 30 June 2007. Subject to the achievement of certain key assumptions2, BBI reaffirms its previous distribution guidance of not less than 14.0 cents per stapled security in the 2007 financial year and is targeting a 7% CAGR in distributions for the 2008 and 2009 financial years1, which equates to approximately 15.0 cents per security for 2008 and 16.0 cents per security for 2009. Mr Steven Boulton, CEO of BBI said “We are extremely pleased that the upsized issue has been well oversubscribed within the bookbuild price range despite the challenging market conditions over the last 24 hours. This is a clear demonstration of investor confidence in the quality of our business and its future prospects. The strong level of investor interest and support is also an endorsement of BBI’s overall strategy and investment opportunities. In addition to the strong participation of existing security holders, we welcome a number of new institutions, including offshore investors to our register”. Joint lead managers for the placement were UBS AG, Australia Branch, Deutsche Bank AG and Tricom Equities Ltd. UBS AG, Australia Branch and Deutsche Bank AG acted as joint bookrunners. DRP Price and Participation summary BBI on Tuesday 27 February confirmed its interim distribution of 7.0 cents per stapled security for the 6 months ended 31 December 2006. The distribution will be paid on 2 March 2007. Eligible investors who have elected to participate in the Distribution Reinvestment Plan (DRP), will be issued BBI fully paid stapled securities.
2
BBI is targeting 7% distribution growth for the FY08 & FY09 periods provided these key assumptions are achieved -
no material or adverse change to key tax or regulatory environments, completion of the DBCT expansion in line with schedule, completion of the NorthWestern acquisition by 1 July 2007 (with an appropriate capital structure).
The details of the interim distribution for the six months ended 31 December 2006 and the related participation in the DRP are as follows: Distribution per stapled security Total Distribution 7.0 cents $104,643,927.22 (i.e. gross distribution before DRP participation) $1.8623 31.78% $71,389,533.74
DRP participation price DRP participation rate Distribution to be paid in cash (on 2 March 2007) Stapled securities to be issued under DRP
17,860,638
The price at which the DRP securities will be issued on 2 March 2007 is the average of the daily weighted average market price of BBI stapled securities sold on the ASX over the 10 trading days ending on the trading day which is 3 trading days before the date that the securities are to be allotted under the DRP (being 14 February 2007 to 27 February 2007 inclusive), discounted by 2.5%. Details of the calculation are as follows: The average of the daily weighted average market price per security for the period 14 February 2007 to 27 February 2007 inclusive (“VWAP”) VWAP rounded to the nearest full cent DRP Participation Price (the above price per security, discounted by 2.5%) $1.9137
$1.91 $1.8623
ENDS Further Enquiries Steven Boulton Chief Executive Officer Babcock & Brown Infrastructure +61 2 9229 1800 Helen Liossis Investor Relations Manager Babcock & Brown Infrastructure +61 2 9229 1800
Babcock & Brown Infrastructure Babcock & Brown Infrastructure (ASX: BBI) is a specialist infrastructure entity which provides investors access to a diversified portfolio of quality infrastructure assets. BBI’s investment strategy focuses on acquiring, managing and operating quality infrastructure assets in Australia and internationally. BBI’s portfolio is diversified across two asset classes: Energy Distribution and Transmission Powerco – the second largest electricity and gas distribution business in New Zealand; IEG – a natural gas and LPG distribution and supply business in the United Kingdom, Channel Islands, Isle of Man and Portugal; Cross Sound Cable - a HVDC transmission cable which links the electricity grids of Long Island and Connecticut in the United States; and Transport Infrastructure Dalrymple Bay Coal Terminal - one of the worlds largest coal export facilities, located in Queensland, Australia; PD Ports – a major British ports operator and owner of the second largest port in the United Kingdom; and WestNet Rail – a 51% equity interest in a rail infrastructure business based in Western Australia. BBI is managed by Babcock & Brown Infrastructure Management Pty Limited (BBIM), a subsidiary of Babcock & Brown Limited (ASX: BNB), a global investment and advisory firm with longstanding capabilities in structured finance and the creation, syndication and management of asset and cash flow-based investments, particularly infrastructure investments. BBI is listed on the Australian Stock Exchange and has a market capitalisation of approximately A$3.4 billion. For further information please visit our website: www.bbinfrastructure.com