As Babcock & Brown Wind Partners battles lower earnings and poor investor sentiment, it has emerged that the chief executive, Peter O’Connell, has sold his entire stake in the company.
In early August the specialist wind energy company surprised the stockmarket with a profit warning after what it described as “particularly unusually [sic] low wind conditions in May and June”. Its securities slumped to a record low of $1.25 in response.
By August 14, 11 days later, Mr O’Connell presented investors with a detailed explanation of the company’s difficulties.
He reiterated there had been delays in the acquisition of three Olivo wind farms in Spain and construction of the Neiderrhein wind farm in Germany.
Only three months earlier, B&B Wind Partners had gone to institutions asking for funds, raising $118.6 million at $1.60 per security.
Mr O’Connell owned 716,000 stapled securities in the company.
As he is not a director and therefore does not have to disclose his holdings immediately to the stock exchange, it is not clear when he sold.
Depending on when Mr O’Connell sold and based on the trading range of B&B Wind Partners of $1.25 to $1.93, his stake probably sold for between $895,000 and $1.38 million.
Mr O’Connell’s decision flies in the face of the actions of B&B Wind Partners’ board.
The chairman, Peter Hofbauer, who is also the global head of B&B’s infrastructure and project finance business, has increased his stake this year.
Between July 10 and July 13 – a month before the surprise downgrade was made public – Mr Hofbauer bought 599,501 securities, outlaying nearly $930,000.
By September 7, the board had sought to offset the impact of a worse-than-expected performance by upgrading the 2007 distribution from 11.2c to 12.5c when it released the full-year loss.
Having predicted a $13.5 million full-year profit in its prospectus last year, the company irritated investors with a $16.2 million loss.
Mr O’Connell said in a press release at the time: “2006 has been a busy and productive year. During the year, Babcock & Brown Wind completed an extensive acquisition program; this saw the portfolio increase from four fully operational wind farms at the [initial public offering] to 16 at the end of the financial year.
“The 2007 year will be a year in which security holders will benefit from Babcock & Brown’s acquisition program and diversification strategy.”
In a conference call he said there was no need for more “material” capital raisings in the short term.
Mr O’Connell did not return the Herald’s call yesterday.
The former Minter Ellison and Gilbert & Tobin lawyer was an Optus director before going to PBL as an executive director and then to the Ten Network.
Before becoming CEO of B&B Wind Partners, Mr O’Connell was most recently managing director of Multiplex’s infrastructure division.
B&B Wind Partners last traded at $1.42, just above the IPO price last October of $1.40.
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