How bemusing that Phil Green’s Babcock and Brown has suddenly found the idea of independent chairmen such a good idea, this morning announcing that it will ditch its own men from the top job at no less than four of its satellites.

And what a particularly interesting time it will be for whoever becomes the “independent” chairman of Babcock & Brown Wind – a company in which BNB has only a 12% stake, but which it manages for juicy fees and dominates.

The odd analyst and journalist has suggested that the sale of European wind farm assets could lift the immediate pressure on BNB. Some of the commentary has taken for granted that BBW will do what’s best for BNB in these difficult times.

That rather begs questions about the strict legal and never mind ethical responsibilities of the BNB board. Right now, I’d rather think the independent directors would be very keen indeed to be seen to be acting, well, independently.

BNB and BBW own some European wind assets separately and some jointly. Back in February BBW and BNB announced they would investigate selling off some European wind farms, giving what I thought was a rather strange reason: they reckoned there was a big gap between the true valuation of those assets and the value the stock market was putting on them.

So, to prove the value of the asset, we have to sell the asset … shades of Vietnamese villages in there somewhere.

Funny thing, the mood of that February announcement and the subsequent appointment of joint sale advisers is rather different to the tone of BBW’s annual report back in September which seemed to be all about building up a fabulous wind empire, rather than selling bits of it off to reduce debt and perhaps return funds to security holders.

Right now, you might think BBW might not get top dollar for selling anything in tandem with BNB given the whiff of a fire sale hanging over proceeding.

So here’s some gratuitous advice for whoever BBW’s next chairman might be: drop the joint sale advisers and hire your very own independent advisers – some strong-minded investment bank that doesn’t do any other work for or with the BNB empire. You’ll need a an absolutely unquestionable business case to flog off your best assets or your name might end up as desirable in the market as Babcock and Brown.

Peter Fray

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Peter Fray
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