Babcock & Brown Residential Land Partners (BLP) has appointed Oaktower Partnership to conduct a strategic review of the business, the company said yesterday in an update to shareholders.
The review should result in recommendations on how to close the gap between BLP's share price and the value of its net tangible assets per share.
"The purpose of the review is to determine an appropriate strategy and structure for BLP to best position the group in the current market environment and to maximise securityholder value," BLP chairRobert Wright said.
Recommendations to the board are expected by the end of the year, but implementation will take additional time, he said.
A listed subsidiary of Babcock & Brown, BLP invests in residential land developments. Its share price began to decline when concerns over the parent company's high-gearing model led to a widespread sell-off of the stock.
Currently trading at around $0.16, shares of BLP have not traded above 80 cents since August 2007.
Part of the review is to assess an appropriate level of gearing for BLP. "Irrespective, a continued priority for BLP going forward is further debt reduction," Wright said.
Over the 2008 financial year the company reduced its senior debt by $25.9 million. As at June 30, 2008, gearing stood at 62.6 per cent of total assets.
