In Babcock & Brown’s latest venture into residential property, the investment firm launched an initial public offering as Babcock & Brown Residential Land Partners (BBRLP). It sought to raise $175m in capital from the issue of 175 million stapled securities at $1 each.
BBRLP will initially acquire an interest in 10 projects in Queensland, New South Wales and Victoria, seven of which are already under development.
Sparke Helmore represented developer BMD/Urbex, which contributed 25 per cent of the Ascot Chase, Victoria, development and 30 per cent of the Kalynda, Townsville, development, two of the largest. Urbex will put $2 million back into the fund, and Babcock will put 17. 5 million into it.
Partner Martyn Tier led the Sparke Helmore team, and senior associate Jennifer Harris handled the financing aspects of the transaction. Sparke Helmore also acts for Babcock & Brown in other matters, making the team familiar with the bank’s sophisticated and tailored financing agreements, including in this case ‘featherweight agreements’ of $1000 each.
With a tight deadline, 20 documents to get signed and 140 pages of BBRLP prospectus to check, lawyers for the developers worked around the clock. “Even if we’d had two more weeks to get it done we’d have used them all up,” admitted Sparke Helmore’s Tier.
BMD/Urbex, which had owned 50 per cent of the Ascot development, cashed out half their interest in the project, retaining 25 per cent. Of the Kalynda development, the client was able to sell 30 per cent of its interest in the project, leaving it cash for use in other projects.
The geographical spread of the development, up and down Australia’s eastern coast, gave the deal logistical challenges. “We were dealing with projects in Queensland and Victoria, with Babcock & Brown in NSW, us in NSW, and our clients in Adelaide,” said Tier.
The firm used their offices in Brisbane, Adelaide and Melbourne, to organise video conferences with Babcock & Brown lawyers in Sparke Helmore’s Melbourne office, the investment firm in its Melbourne and Sydney offices, and BMD/Urbex in the Adelaide office.
Minter Ellison acted for Babcock & Brown. Sydney-based corporate partner James Philips and Melbourne real estate head Angela Schooneman led the team.
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