leasing division holding up
Despite Babcock & Brown’s falling profits, investment into
its leasing division is holding up with managed capital to expand
aircraft under management in excess of $584m (€394m).
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This follows the Australian investment company’s report that its
H1 net profit has fallen by 34 per cent, to €125.5m.
Michael Larking, chief financial officer said: “The Corporate
& Structured Finance division (CSF) will gradually be wound
down.”
Head of CSF, Rob Topfer, will step down from that role but will
retain other responsibilities within the group.
The company said that its future strategy would be to “focus
resources and capital on sectors where the company has a clear and
proven competitive advantage in both origination and asset
management” – including operating leasing.
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By GlobalDataBabcock & Brown has been forced to answer to shareholders
after a collapse in its share price following the credit crunch.
Both chairman Jim Babcock and chief executive Phil Green have
agreed to step down but will remain on the board, triggering an
outcry among some investors who believe management have yet to take
responsibility for the company’s deterioration. A quarter of the
company’s 1,600 staff are to be laid off in order to cut costs.
Analysts have suggested the cause of B&B’s decline is its
over reliance on cheap debt, which in light of falling asset values
is also causing income to fall. There is further speculation that
the company’s dependence on fees made by its satellite companies,
which are now declining in keeping with the economic downturn, is
also to blame for this sudden drop.
Its share price recently slumped to £1.18 on August 23 2008,
compared to £18.88 in June 2007.
