Babcock & Brown CEO, chairman resign

By Mette Fraende

SYDNEY (Reuters) - Australian investment firm Babcock & Brown Ltd BNB.AX (BNB) announced on Thursday that its chief executive and chairman will step down as the company battles a collapse in its share price amid investor concerns over its future.

Babcock's shares have lost nearly 90 percent in value this year as worries about the viability of its debt-funded investment model intensified amid the global credit crunch.

The shares fell almost 30 percent on Thursday after the announcement of the management changes and other restructuring measures, such as the winding down of its corporate and structured finance division.

ABN AMRO analyst John Heagerty said the market had not taken much comfort in the revamp because it did not go as far as some had hoped.

"Perhaps the moves weren't as significant as people might have expected," he said.

By 0228 GMT, shares in BNB, which manages about A$72 billion in global infrastructure assets, were down 26 percent at A$2.55. The shares had stood at A$31.08 in November 2008.

Babcock & Brown, like bigger rival Macquarie Group Ltd (MQG.AX), buys assets such as ports and utilities and bundles them into listed and unlisted funds from which it earns management fees.

On Monday, BNB took a fresh blow when one of its managed funds, Babcock & Brown Power Ltd (BBP.AX), in which it holds about 10 percent, said it would take a A$452 million writedown ID:nSYD145282.