SGX-ST Release
24 April 2009
2009 ANNUAL GENERAL MEETING PRESENTATION
Babcock & Brown Global Investments Limited will today hold its 2009 Annual
General Meeting (“AGM”) at Fullerton Hotel Singapore, Ballroom 2, 1 Fullerton
Square, Singapore 049178 at 1.00pm.
A copy of the presentation to be given at the AGM is attached.
By order of the Board of Directors
Date:
24 April 2009
ENDS
FURTHER INFORMATION:
Julian Blackley
ir@bbglobalinvestmentslimited.com
+612 9216 1394
About Babcock & Brown Global Investments Limited
(http://www.bbglobalinvestmentslimited.com)
Babcock & Brown Global Investments Limited (“BBGI”) is a mutual fund
company incorporated in Bermuda that provides investors access to a diversified
portfolio of assets and economic exposures across three target sectors:
operating lease assets, loan portfolio and securitisation assets, and alternative
assets. BBGI is managed by Babcock & Brown Global Investments Management
Pty Limited, a wholly-owned subsidiary of Babcock & Brown International Pty
Limited, the main operating and asset owning entity of the Babcock & Brown
Group.
BABCOCK & BROWN GLOBAL INVESTMENTS LIMITED 2009 AGM
ORDER OF PROCEEDINGS
Chairman’s Address
SLIDE 1:
BABCOCK & BROWN GLOBAL INVESTMENTS LIMITED – 2009
ANNUAL GENERAL MEETING
Good Afternoon Ladies and Gentlemen.
My name is Phil Mackey and I am the Chairman of Babcock & Brown Global Investments Limited. It is my
pleasure to welcome you to the 2009 Annual General Meeting of Babcock & Brown Global Investments
Limited.
As a matter of protocol and courtesy and before we proceed with this meeting, could you please ensure that
you have switched off your cell phones and that there are no recording devices operative in the room.
Photography is also prohibited.
I have been advised that there is a quorum present and accordingly I declare the meeting officially open.
SLIDE 2:
DISCLAIMER
Today’s meeting will be accompanied by a presentation which has been released to the Singapore
Exchange Securities Trading Limited today. It is usual practice for such presentations to include a disclaimer,
which is now on the screen.
SLIDE 3:
BBGI BOARD & BBGIM MANAGEMENT TEAM
Firstly, allow me to introduce my fellow Directors. Seated on the podium are Independent Directors
Dilhan Sandrasegara and Lee Soon Kie, as well as my fellow Manager Appointed Director, Julian Blackley.
Julian is also the Chief Executive Officer of Babcock & Brown Global Investments Management Pty Limited,
our Manager.
Dialling into this meeting from Bermuda are our two Bermudan based Independent Directors, Tara Railton
who is also our Deputy Chairman, and Joel Schaefer.
As announced in the release to the market on 6 April 2009, following a number of changes to the BBGI
Board over the last twelve months, the Company has commenced a process to indentify and recruit new
directors to renew the BBGI Board, which under the Bye-Laws of the Company, may comprise a maximum of
9 directors. As a first step in this renewal program, the Board has identified Mr. Nicholas Campbell who will
join the Board with effect during the week commencing Monday 27 April 2009 as another Independent
Director on the BBGI Board. Nicholas is based in Bermuda and has significant experience in the asset
classes in which the Company has invested and accordingly on behalf of my fellow directors, I am pleased to
welcome Nicholas to the Board. Unfortunately Nicholas is unable to join the meeting from Bermuda.
Also as announced and as part of this renewal program, the Board recently appointed Spencer Stuart in
Singapore to assist with indentifying and recruiting new Singapore based directors. This was an extensive
process and a group of well qualified and interested candidates were put forward for the Board’s
consideration. After careful consideration, the Board has resolved to appoint Mr Sanjiv Misra and Mr Adrian
Chan as new Singapore based Independent Directors to the BBGI Board, with effect during the week
commencing Monday 27 April 2009, subject to receipt of all necessary regulatory approvals. Unfortunately
Sanjiv and Adrian are both unable to be with us here today, however I have total confidence that they will
add considerable value to the Board as well as to the Company and its shareholders. On behalf of my fellow
directors, I am pleased to welcome Sanjiv and Adrian to the Board.
Dilhan Sandrasegara and Lee Soon Kie have advised the Board that it is their current intention to step down
from the Board following completion of Phase 2 of the Company’s Strategic Review (“Strategic Review”) and
with Sanjiv and Adrian joining the Board at this time, this will allow for a very smooth and orderly transition
1
between the incumbent and incoming Singapore based directors. I would like to take this opportunity on
behalf of the Board to thank both Soon Kie and Dilhan for their very valuable contribution to the Board and
the Company and I look forward to their ongoing support and contribution through to completion of Phase 2
of the Strategic Review.
The Board consider that at this time, this sufficiently completes the Board renewal programme but will
reconfirm this upon completion of Phase 2 of the Strategic Review.
Also joining this meeting via telephone from Bermuda is Ms Sasha Castle, the Company Secretary.
Also in attendance today are:
• Representatives of our Singapore share transfer agent, Boardroom Corporate & Advisory Services
Pte Ltd
• Sam Kok-Weng, the external audit partner from PricewaterhouseCoopers; and
• Andrew Suckling from Standard Chartered Bank, the independent adviser leading the Company’s
Strategic Review.
Later in the meeting, Sam Kok-Weng will be available to answer questions regarding the auditor’s report and
the audit of our Company’s accounts.
Today we will be seeking shareholder approval on a number of matters. All open proxies directed to the
Chairman will be voted in favour of each of the resolutions which will be laid before you today.
The Notice of Annual General Meeting dated 1 April 2009 has been sent to all registered shareholders
entitled to receive that Notice. If required, copies of the notice are available from staff around this auditorium.
If there are no objections I propose the Notice of Annual General Meeting to be taken as read.
Thank you.
SLIDE 4:
AGENDA
The remaining order of business for today’s meeting will be as follows:
□
I will turn the podium over to Julian Blackley to present a recap of our performance in FY2008 and
provide an overview of the outlook for the portfolio for 2009.
□
Dilhan Sandrasegara will then provide an update in respect of the Strategic Review of the Company
currently being undertaken by Standard Chartered Bank.
□
After that, there will be an opportunity to ask questions from the floor regarding the Company’s business
and Strategic Review. Only shareholders and proxies are entitled to be heard and to vote at this meeting.
I will ensure however that there is ample time for shareholders to ask questions.
□
We will then move to the formal resolutions to be put to today’s meeting and after each resolution is
introduced, there will be an opportunity for shareholders to ask any questions in relation to that resolution
before votes are taken from the floor.
□
After all resolutions have been handled, I will reopen the floor for any remaining questions.
□
After all that, we will adjourn outside for some light refreshments and a further opportunity for informal
discussions between shareholders and the Board.
Let me start by saying that the 2008 financial year has been a very disappointing year for BBGI. The Board
recognises that there have been a number of contributing factors both internal (in the context of the
difficulties with the relationship with Babcock & Brown and the financial difficulties that that group has faced)
and the external market conditions that have led to the current situation.
The Board recognises that it is its responsibility to navigate the business through both calm and turbulent
conditions. In hindsight, we can all see that these have been the most difficult conditions of recent times.
2
That said the Board has been very focussed on addressing these matters and Dilhan will speak shortly on
the Strategic Review which was first addressed in May of 2008.
The Board accepts its responsibility and is extremely disappointed with the performance of BBGI and for our
shareholders. The Board sincerely regrets the loss of shareholder value and is well advanced in
implementing the findings from Phase 1 of the Strategic Review and is pleased with the progress of Phase 2
of the Strategic Review to address the challenges ahead.
SLIDE 5:
BABCOCK & BROWN GROUP ISSUES
Before I hand over to Julian, I would like to make some comments in relation to the Babcock & Brown Group
and the impact on our Company arising from the voluntary administration of Babcock & Brown Limited.
As you may be aware, the ultimate Australian parent of the Babcock & Brown Group, namely Babcock &
Brown Limited (“Babcock & Brown”), was placed into voluntary administration on 13 March 2009. Babcock &
Brown’s interest in our Manager, Babcock & Brown Global Investments Management Pty Limited (“BBGIM”)
is held through Babcock & Brown International Pty Limited (“Babcock & Brown International”). Babcock &
Brown International is the main operating and asset owning entity of the Babcock & Brown Group. We have
been advised by our Manager that the appointment of administrators to Babcock & Brown is not expected to
have any material impact on BBGIM. Babcock & Brown International is expected to continue to operate and
proceed with the orderly realization of its assets to reduce debt over an approximate 2-3 year time horizon.
BBGIM is expecting to continue operating in the normal course for the foreseeable future and it does not
expect the voluntary administration of Babcock & Brown to result in any significant impact on BBGI’s portfolio
of assets or the ongoing management of BBGI. Shareholders should also note that Babcock & Brown and
the BBGI Group have separate ownership, boards of directors and legal structures.
SLIDE 6:
AGENDA – MANAGING DIRECTOR’S ADDRESS
I now invite Julian Blackley to address the meeting on the Company’s performance in FY2008 and provide
an outlook for the portfolio for 2009.
Julian Blackley
Thank you Phil, and good afternoon ladies and gentlemen. May I add my welcome to that of the Chairman
and also my thanks for your attendance today.
As Phil has indicated, I will present a recap of the 2008 year focussing on the performance of the Company
and the outlook from a portfolio perspective.
SLIDE 7:
2008 OVERVIEW
The 2008 year was a year that I’m sure we will all remember with many markets and economies quickly
deteriorating, at a pace that accelerated in the second half of the year. BBGI has felt the impact of the global
financial crisis across the portfolio and this can be seen in the sharp reduction in the net asset value of the
Company from 79c at the end of 2007 to 40c at the end of 2008.
That said, the steps taken by the Company to de-lever in anticipation of the worsening conditions have
stabilised the Company and positioned it well to ride through what is expected to be a very difficult 2009.
A number of asset write-downs have been recorded during the year and particularly in the last quarter of
2008. Some of these write-downs are due to the accounting rules and we do see more long term value in
certain assets as compared with their written down values, however the global economic downturn has of
course had very real impacts on the portfolio and like many companies, if conditions worsen, further
pressure will be placed on the portfolio.
A strong 1H08 dividend of 5.2 Singapore cents per share was paid and as advised to the market earlier
today, the Company has provided dividend guidance to the market in respect of the 1H09 dividend of at least
1.7 Singapore cents per share. This dividend amount includes cash economic income of 0.65 Singapore
cents per share in respect of the first half of 2009 with the remainder relating to cash economic income
3
earned in respect of the second half of 2008. The Company is not in a position to provide further dividend
guidance to the market beyond 1H09 until the results of Phase 2 of the Strategic Review are announced.
There were two divestments during the 2008 year which resulted in the full return of principal and all accrued
interest, and a further investment in one existing investment. We have of course sold the music copyright
assets since year end and this was a tremendous result for the Company in very challenging conditions. It is
not expected that there will be significant activity on the investment/divestment front through 2009 given the
current global backdrop and impacts it has had on the capital markets. I should further clarify that no
investment opportunities will be considered until at least Phase 2 of the Strategic Review is completed and
the outcomes are known.
The Company has appointed Standard Chartered Bank as its strategic adviser and Dilhan will update you
shortly on the status of the review and the outcomes to date.
SLIDE 8:
KEY FINANCIAL DATA FOR FY08
In terms of key financial data, the numbers largely speak for themselves. The loss for the year was driven by
impairment charges and unrealised foreign exchange losses. Cash economic income continues to be
positive and pleasingly following the repayment of the Corporate Debt facility as announced earlier today, the
Company is intending to pay a dividend in respect of 1H09 and subject to the results of the Strategic Review,
expects to return to paying regular dividends to shareholders. Debt levels have reduced and now the true
gearing level of the Company is below 10%.
SLIDE 9:
2009 YTD
Turning to the 2009 year to date….
The Company restructured the Ancora investment in Q109 for a number of reasons. Firstly the commercial
rationale for the program had disappeared, the demand for the Ancora commercial paper had lessened and
the pricing of the program vs. direct investment in the Ancora assets was similar. The restructure of the
investment has simplified the structure for BBGI but in reality the change has resulted in the move from an
indirect interest to direct ownership, noting of course that the Ancora assets were already consolidated into
the results of BBGI.
The Company has substantially de-levered as a result of the sale of the music copyright assets which also
resulted in a gain on sale in very difficult market conditions. The sale also allowed the Company to
recommence distributing cash economic income to shareholders and has earlier today provided distribution
guidance of at least 1.7 Singapore cents per share in respect of 1H09.
Pleasingly, the Company has no solvency concerns, no refinancing pressures and continues to generate
positive cash economic income for shareholders.
Given there has been further deterioration in the financial markets as well as in a number of economies in
which we have invested, the Company is expecting to make additional write-downs in the Q109 results.
However these are not expected to be of the magnitude seen previously.
In closing, 2009 will be a difficult year in a global sense. I do believe the Company has made the right
decision to de-lever ahead of the curve to stabilise in light of the current liquidity crunch that is expected to
continue through 2009. The Company is well positioned for the challenges ahead with no refinancing risks
and no solvency concerns. I would like to personally say on behalf of the management team that we remain
very committed to supporting the Company and working with the Board to extract the maximum value from
the portfolio for my fellow shareholders.
SLIDE 10: COMPANY FOCUS FOR 2009
The outlook for the Company is of course very dependent on the results of the Strategic Review which
Dilhan will speak on.
Against a global backdrop which is expected to continue to be very challenging, the Company will focus
principally on:
4
•
•
•
•
•
continued active asset management to ensure maximum value is extracted for shareholders;
return to paying regular dividends;
separation from the Babcock & Brown Group;
finalise the strategic direction for the Company following Phase 2 of the Strategic Review; and
refreshing the Company board as well as the underlying committees.
We do not expect that 2009 will be a year of growth and we are also not expecting that there will be further
significant divestments. 2009 will be a year of consolidation, to ride through the storm and position for a
strong 2010 and beyond.
SLIDE 11: AGENDA: STRATEGIC REVIEW
I will now hand over to Dilhan who will provide an update in respect of the Strategic Review.
Dilhan Sandrasegara
SLIDE 12: STRATEGIC REVIEW
Thank you, Julian.
Good afternoon, ladies and gentlemen. On behalf of the Board, I am pleased to provide shareholders with
an update on the Strategic Review.
The Strategic Review process was initiated by the Board in August 2008 following a meeting of the Board in
May 2008 to discuss the future strategy of the Company in light of the worsening economic climate and
conditions at that time. The Board appointed Standard Chartered Bank as an independent strategic adviser
to the Company on 3 October 2008. Under the terms of the engagement, Standard Chartered Bank’s role
under Phase 1 of the Strategic Review was to undertake a review of the Company’s assets and businesses,
and then to make recommendations on strategic options that are available to the Company.
In view of the composition of the members of the Board, we recognised from the start that it is important for
the Strategic Review to be conducted on an independent basis. For that purpose, an independent
committee comprising all the Independent Directors of the Company was formed to govern the review
process. Standard Chartered Bank was told to act solely on the instructions of the independent committee.
Standard Chartered Bank completed Phase 1 of its Strategic Review and submitted its report and
recommendations to the Board.
The Board took into consideration Standard Chartered Bank’s
recommendations and announced on 19 March 2009 that it will implement the following four immediate
measures:
o
Firstly, to continue to de-lever by repaying the Company’s corporate debt facility;
o
Secondly, to resume the Company’s distribution policy following full repayment of the corporate debt
facility;
o
Thirdly, to seek shareholders’ approval for a change in the Company’s name; and
o
Lastly, work with advisors to achieve separation from the Babcock & Brown Group.
I am pleased to inform shareholders that we have made significant progress since the 19 March
announcement.
As you are aware, we announced on 8 April 2009 the divestment of our music copyright assets for US$48.1
million. The divestment allowed us to repay the asset-specific debt, as well as to use the excess proceeds to
repay our corporate debt facility and as announced earlier today, the Company has completely repaid the
corporate debt facility.
5
SLIDE 13: STRATEGIC REVIEW
With the full repayment of the corporate debt facility, we have today announced that we will be resuming the
Company’s distribution policy. The Company’s intention is to pay a dividend of at least 1.7 Singapore cents
per share for the first half of 2009.
At this AGM, we are also seeking shareholders’ approval to change the Company’s name to “Global
Investments Limited”. The proposal is being made in light of the decision by the Company to work with
advisors to achieve separation from the Babcock & Brown Group. The Registrar of Companies of Bermuda
has already approved the reservation of the name.
The last remaining step from Phase 1 of the Strategic Review is to identify the best option to achieve
separation from the Babcock & Brown Group. We believe that separation from the Babcock and Brown
Group is in the Company’s best interest and have engaged Standard Chartered Bank to commence Phase 2
of the Strategic Review. The objective of Phase 2 of the Strategic Review is to consider all available options
available to the Company including internalisation of a management team or to identify potential strategic
investors and/or a new manager for the Company as well as any other potential options. The Board is of the
view that whatever option is to be considered, there must be a viable go forward strategy for the Company. If
one is not available, then the Board would need to consider if it was in the best interests of shareholders to
conduct an orderly realisation of the Company’s assets and return capital to shareholders.
The Board also recognises that the incumbent management team is integral not only to the ongoing
management of the business but in assisting in the implementation of the outcomes of Phase 2 of the
Strategic Review whatever they may be. The Board highly values their contribution and will take steps to
ensure that they have been appropriately incentivised to remain in their roles and to assist with the ongoing
Strategic Review and implementation of the outcomes.
SLIDE 14: STRATEGIC REVIEW
Standard Chartered Bank has commenced the process of reaching out to parties that could be potential
strategic investors and/or manager as well as considering the viability of an internalised model. The
response so far from external parties has been encouraging with interest from both local and foreign fund
managers. The Independent Committee is in the process of evaluating these proposals.
In our evaluation of these proposals, we will be guided by several key criteria:
o
Firstly, the credibility of the new manager and the sponsors or shareholders of the new manager;
o
Secondly, the business plan and strategy proposed by the new manager;
o
Thirdly, the ability of the new manager to provide future acquisition opportunities to the Company;
o
Fourthly, that the proposed management structure and fee are reasonable and in line with market
norm; and
o
Lastly, whether these compare favourably or otherwise with an internalised model.
The decision process will take time. We need to ensure that we make a decision that in our view is in the
best interests of shareholders but let me make clear that any recommendation will be subject to shareholder
approval. We will announce further details at the appropriate time as the evaluation process progresses but
we anticipate that this should be no later than 30 June 2009.
Thank you. I will now hand you back to the Chairman.
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Chairman
SLIDE 15: QUESTIONS?
Thank you, Dilhan. I would now like to open the meeting to any questions that you may have in respect of
either the Company’s performance or the Strategic Review. I will ask Julian to respond to questions on the
Company’s performance and Dilhan to respond to any questions on the Strategic Review.
In this context however, I ask that you hold any questions you may have with respect to any of the
resolutions to be considered at today’s meeting until we reach the time of the meeting when those
resolutions are about to be put to the floor and voted on. Also, at the end of the meeting, I will re-open the
floor to any final questions you might have.
Only Shareholders and proxies are entitled to ask questions. Visitors are not eligible to ask questions.
If you do have a question please raise your hand, and an attendant will bring you a microphone. Before
asking your question, please state your name. I ask that you please do not ask more than 1 question at a
time unless of course there are no other questions from other shareholders.
Are there any questions on the Company’s performance or the Strategic Review?
We will now move to the formal business for today’s meeting as set out in the Notice of Meeting and the
formal Resolutions to be put to the meeting.
7
Babcock & Brown
Global Investments Limited
2009 Annual General Meeting
DISCLAIMER
Information contained in this presentation is intended solely for your personal reference and is strictly confidential. Such information is subject to change
without notice, its accuracy is not guaranteed and it may not contain all material information concerning Babcock & Brown Global Investments Limited
(“BBGI”) or Babcock & Brown Global Investments Management Pty Limited (“BBGIM”). Neither BBGI, BBGIM nor any of their respective affiliates,
advisors or representatives make any representation regarding, and none of them assumes any responsibility or liability whatsoever (in negligence or
otherwise) for, the accuracy or completeness of, or any errors or omissions in, any information contained herein nor for any loss howsoever arising from
any use of this presentation. The recipient should consult with their own legal, tax and accounting advisers as to the accuracy and application of the
information contained in this presentation and should conduct their own due diligence and other enquiries in relation to such information. By attending this
presentation, you are agreeing to be bound by the restrictions set out below. Any failure to comply with these restrictions may constitute a violation of
applicable securities laws.
The information contained in this presentation has not been independently verified. No representation or warranty, expressed or implied, is made as to,
and no reliance should be placed on the fairness, accuracy, completeness or correctness of, the information or opinions contained herein. It is not the
intention to provide, and you may not rely on this presentation as providing, a complete or comprehensive analysis of BBGI’s financial or trading position or
prospects. The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change without
notice.
In addition, the information contained herein contains projections and forward-looking statements that reflect BBGI’s, BBGIM’s, their associates and all
their directors’ current views with respect to future events and financial performance. These views are based on a number of estimates and current
assumptions which are subject to business, economic and competitive uncertainties and contingencies as well as various risks and these may change over
time and, in many cases, are outside the control of BBGI, BBGIM, their associates and all their directors. No assurance can be given that future events will
occur, that projections will be achieved, or that assumptions underpinning expectations are correct. Actual results may differ materially from those forecast,
projected or guided.
This presentation is not and does not constitute or form part of any financial product advice, offer, invitation or recommendation to purchase or subscribe
for any securities and no part of it shall form the basis of or be relied upon in connection with any contract, commitment or investment decision in relation
thereto. This presentation does not carry any right of publication. This presentation may not be used or relied upon by any other party, or for any other
purpose, and may not be reproduced, disseminated or quoted without the prior written consent of BBGI or BBGIM.
This presentation is not for distribution, directly or indirectly, in or into the United States.
This presentation is not an offer of securities for sale into the United States. The securities may not be offered or sold in the United States or to, or for the
account or benefit of, US persons (as such term is defined in Regulation S under the US Securities Act of 1933, as amended) unless they are registered or
exempt from registration.
2
BBGI BOARD
Current BBGI Board
BBGI Board effective week of 27 April 2009
Philip John Mackey
Philip John Mackey
Chairman / Manager Appointed Director
Chairman / Manager Appointed Director
Julian Blackley
Julian Blackley
Manager Appointed Director and CEO of the Manager
Manager Appointed Director and CEO of the Manager
Tara Leonard Railton
Tara Leonard Railton
Deputy Chairman / Independent Director
Deputy Chairman / Independent Director
Joel Peter Schaefer
Joel Peter Schaefer
Independent Director
Independent Director
Dilhan Pillay Sandrasegara
Dilhan Pillay Sandrasegara1
Independent Director
Independent Director
Lee Soon Kie
Lee Soon Kie1
Independent Director
Independent Director
Nicholas Campbell
Independent Director
Sanjiv Misra
Independent Director
Adrian Chan
Independent Director
3
1
Dilhan Sandrasegara and Lee Soon Kie will step down from the Board following Phase 2 of the Strategic Review.
AGENDA
Item
Presenter
Managing Director’s Address
Julian Blackley
Strategic Review
Dilhan Sandrasegara
Questions from Shareholders
Formal Proceedings
Refreshments
4
Phil Mackey
BABCOCK & BROWN GROUP ISSUES
• Australian parent of the Babcock & Brown Group
Babcock &
Brown Limited
(“BBL”)
Babcock &
Brown
International
Pty Limited
(“BBIPL”)
• Placed into voluntary administration on 13 March 2009
• The appointment of administrators to BBL is not expected to have any
material impact on the Manager of BBGI.
• Main operating and asset owning entity of the Babcock & Brown Group
• BBL’s interest in BBGI’s Manager, BBGIM, is held through BBIPL
• BBIPL is expected to continue to operate and proceed with the orderly
realisation of assets to reduce debt over an approximate 2-3 year time
horizon
¾ BBGIM is expecting to continue operating in the normal course for the foreseeable future and it
does not expect the BBL administration to result in any significant impact on BBGI’s portfolio of
assets, BBGI’s corporate debt facilities or the ongoing management of BBGI
¾ BBL and the BBGI Group have separate ownership, boards of directors and legal structures
5
AGENDA
1. Managing Director’s Address
2. Strategic Review
3. Formal Proceedings
4. Questions from Shareholders
5. Refreshments
6
2008 OVERVIEW
NAV
Dividend
• Net Asset Value of S$0.40 per Share at 31 December 2008
• Renewal of the corporate debt facility with substantially reduced leverage
• 1H08 dividend of 5.2 cps was paid (no dividend declared for 2H08)
• Exit from AGSO Loan Guarantee – resulted in the release of A$50m to BBGI
Divestments
&
Investments
Strategic
Adviser
7
• Exit from Paradox Loan – the loan of US$15m was repaid in full together with
all accrued interest
• Increase in investment in European railcar portfolio – the BBGI Group invested
a further €1.2m in Babcock & Brown Rail Investments Limited in satisfaction of
a previous funding commitment
• Appointment of Standard Chartered Bank as strategic adviser
KEY FINANCIAL DATA FOR FY 2008
1
8
1
Total Revenue
S$55.7 mil
2
Cash Economic Income
S$25.1 mil
3
Net Profit After Tax
S$(147.1) mil
4
Net Asset Value
S$0.40
5
2008 Distributions
5.20 cps
6
Gearing
16.91% of GIV 1
As at 31 December 2008; GIV is Gross Investment Value as defined in the Company’s Corporate Debt Facility
2009 YTD
‰
‰
9
Restructure of Ancora investment in Q109
¾
Simplified the structure of BBGI
¾
Move from indirect interest to direct ownership of the Ancora assets
Sale of Music Copyright Assets in Q209
¾
Company has substantially de-levered as a result of the sale
¾
Sale has allowed Company to provide distribution guidance of at least 1.7 Singapore
cents per share in respect of 1H09
‰
Reduction in debt levels has allowed the Company to provide distribution guidance in
respect of 1H09
‰
Some further write-downs in the Q109 results expected given worsened market conditions
‰
BBGI is well positioned for the challenges ahead with no refinancing risks and no solvency
concerns
COMPANY FOCUS FOR 2009
¾ Continued active asset management to maximise shareholder returns
¾ Return to paying regular dividends
¾ Execute on separation from Babcock & Brown
¾ Finalise strategic direction for the Company following Phase 2 of the Strategic Review
¾ Refresh the Company board with new and additional Independent Directors
10
AGENDA
1. Managing Director’s Address
2. Strategic Review
3. Formal Proceedings
4. Questions from Shareholders
5. Refreshments
11
STRATEGIC REVIEW
‰
Standard Chartered Bank (“SCB”) appointed on 3 October 2008 as independent strategic adviser
¾
‰
‰
‰
SCB’s role under Phase 1 of the Strategic Review:
¾
Undertake review of BBGI’s assets and businesses
¾
Make recommendations on available strategic options
Following completion of Phase 1, the Directors have considered SCB’s recommendations and
announced on 19 March 2009 the following four immediate measures:
1.
Continue de-levering by repaying the corporate debt facility
2.
Resume distribution policy following full repayment of corporate debt facility
3.
Seek shareholders’ approval for change of Company’s name
4.
Work with B&B and advisers to identify best option for separation from management
contract
On 8 April 2009, BBGI announced divestment of its music copyrights assets for US$48.1 million.
Net proceeds, after repayment of asset-specific debt, used to de-lever:
¾
12
SCB acts solely on instructions of an independent committee, comprising all independent
directors
Corporate debt facility now fully repaid
STRATEGIC REVIEW
‰
Today, the Company announced that the distribution policy will resume:
¾
‰
At this AGM, we are seeking shareholders’ approval to change the Company’s name:
¾
‰
Dividend guidance for 1H 2009 of not less than 1.7 Singapore cents per share
Proposed new name is “Global Investments Limited”
Last remaining step from the Phase 1 review is separation from Babcock & Brown Group:
¾
Actively work with B&B on process of separation
¾
Identifying best option for separation is part of Phase 2 which has commenced
¾
Objective of Phase 2 is to consider all available options to the Company including
internalisation or to identify potential strategic investors and/or a new manager for the
company as well as other potential options
‰
Whatever option is considered, there must be a viable go forward strategy
‰
If one is not available, then the Board will need to consider if it is the best interests of
shareholders to conduct an orderly realisation of the Company’s assets and return capital to
shareholders
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STRATEGIC REVIEW
‰
‰
‰
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SCB has commenced process of reaching out to parties that could be potential strategic investors
and/or manager as well as considering viability of an internalised model:
¾
Responses from external parties encouraging
¾
Interest from both local and foreign fund managers
¾
Independent Committee currently evaluating proposals along with internalised model
Key criteria in assessing proposals:
¾
Credibility and sponsorship
¾
Business plan and strategy
¾
Ability to provide future acquisition opportunities
¾
Reasonable management structure and fee
¾
Compare to internalised model
Process will take time to ensure selection of right partner:
¾
Directors will make announcements at appropriate time but anticipate by 30 June 2009
¾
Shareholders’ support and approval will be sought
QUESTIONS?
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THANK YOU
For further information, please contact:
Julian Blackley
+61 2 9229 1800
ir@bbglobalinvestmentslimited.com
Level 23, Chifley Tower
2 Chifley Square
SYDNEY NSW 2000
www.bbglobalinvestmentslimited.com
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