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Local wind farm project not expected to be affected by company’s financial losses  

A sharp drop in stock prices and investor confidence in the global giant Babcock & Brown could have worldwide impact for the business, but a company spokesman said Friday it should not affect plans to develop wind turbines in eastern Logan County.

Stock for the multinational company fell more than 50 percent on the Australian stock market in the last three days of the week, prompting a syndicate of 25 banks to consider reviewing a $2.8 billion loan, which is only a small portion of the conglomerate’s $46 billion debt, according to reports from various financial services and newspapers that cover Australian business.

It closed at $5.25 a share in Australian dollars, or just under $5 a share in U.S. dollars. The price per share fell almost 24 percent Friday and 27.5 percent on Thursday. Shares were trading for $35 Australian a year ago, according to the reports.

Analysts are speculating that the company’s sale of European wind assets, which were put on the market earlier this year, could be only the first step in a broader liquidation of the $75 billion in assets the companies control.

But Matt Dallas, a company spokesman, said neither the company’s broader financial situation nor the sale of European wind assets will hinder plans to build an estimated $300 million wind farm in Jefferson and Monroe townships.

“It’s business as usual here at B&B,” Mr. Dallas said. “We are going to continue to do what we do.”

That has been the company’s motto in recent days, and they point to the company’s role in an approximately $7 billion acquisition of the British rail leasing company Angel Rails that was announced earlier this week.

Mr. Dallas said that with 20 operational wind farms and another 20 under development, the company is a major player in the United States’ wind development.

“We are one of the leaders in wind energy in the country,” Mr. Dallas said. “Our strategy is to develop, own and operate these facilities for the longterm.”

The European wind assets were put up for sale earlier this year, Mr. Dallas said, but the company continues to invest in North American wind assets.

Roger Brown, a Bellefontaine resident who has signed a lease with Babcock & Brown to put wind turbines on his Jefferson Township property, said he was not aware of the broader company’s financial picture and said he has not been contacted about any plans to slow down or end the local project.

“They are such a massive company and diversified in so many ways any one division could have a problem at one time but it probably wouldn’t affect other divisions,” he said. “There have been no indications from them to me of stoppage of the wind turbine development. It is a time-consuming process, but it is still moving forward.”

Babcock & Brown, which originally started in San Francisco, exploded onto the international market to much acclaim in 2004. Their business model that thrives in a bull market is coming under scrutiny in today’s bear market.

In addition to owning wind developments, Babcock & Brown is a major player in the Australian natural gas market and an announcement that a June 3 explosion is expected to hurt the subsidiary Babcock & Brown Power’s bottom line marked the beginning of this week’s massive decline in stock value.

The company also own Eircom, Ireland’s main telecommunications system, a San Francisco area electric infrastructure, a North American oil pipeline and British ports.

By Reuben Mees
Examiner Staff Writer

The Bellefontaine Examiner

14 June 2008

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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