HvB strands B&B

German bank HvB is the lender warning the blame for freezing an unspecified but "material" amount on deposit from Babcock & Brown. B&B announced the dispute over the frozen funds to the stock exchange yesterday morning and requested a trading halt. And it's hard to see B&B resolving its fraught debt problems with its bankers, let alone relisting.

B&B had, earlier this week, attempted to sell it 25 strong banking syndicate on the merit of a business plan to stabilise its debt load of $3.1 billion within the corporate entity, with a target of repaying half that debt by 2011.

The specialist fund manager's new business plan emphasised infrastructure finance as the core business with continuing asset sales as "opportunities arise" and with a view to "preserving value" to use the terms of the market announcement on Wednesday.

HvB - a former cornerstone investor and long time lender to B&B - has not bought this revised vision.

So short of some other bank buying HvB's B&B debt or lending B&B more money to repay HvB but not some other bank it seems likely B&B will soon enter administration.