INSIDER

Babcock and Brown Infrastructure hopes to unveil a long-awaited $1.75 billion recapitalisation deal as early as today after receiving sufficient backing for an institutional placement.

It seems some of the delays associated with the deal stemmed from the fact that Australian institutions were relatively unwilling to assist with the recapitalisation  their US counterparts were more open-minded.

In the end, Credit Suisse and Macquarie Capital have underwritten a $600 million or so institutional placement and $250 million share purchase plan.

Brookfield Asset Management will chip in at least $900 million to emerge as the new cornerstone investor with a 50 per cent stake in the Dalrymple Bay coal port in Queensland and all of PD Ports of Britain, although it may not have a majority of the company at a corporate level.

There are also suggestions Brookfield could receive a very cheap option covering the Australian Energy & Transmission Distribution portfolio BBI had gained through the ill-fated takeover of Alinta.

Initially, BBI had warned that the recapitalisation deal could lead to the conversion of all of its hybrid securities, which would leave little left for existing shareholders. However, there are suggestions a full conversion might be averted as part of the extremely complicated deal.

Brookfield is not the only large Canadian investor sniffing around Australian infrastructure assets.

Alberta Investment Management has told Canadian media it could announce one or two private equity deals  each worth about $C200 million  by the end of the year. One of the options is an infrastructure deal in Australia.

Canadian investors interested in Australia are looking beyond infrastructure. Commonwealth Bank this week issued $C300 million of so-called "maple bonds" in the Canadian market, which had been relatively dormant of late.

Toronto's Globe and Mail said the five-year notes carry a 3.625 per cent interest rate and the raising was upsized from an initial $C150 million target in light of strong demand.

TRUNK CALLS

On first glance, Telstra would appear to have enough on its plate  such as working out the best way to separate the company and rifling through submissions to a Senate inquiry made by citizens, fund managers and competitors.

Optus, for example, wryly noted that plenty of analysts had maintained "buy" recommendations on Telstra following the Federal Government's announcement of proposed reforms.

And it seems the regulatory pressure on the home front may not have prevented Telstra from pursuing overseas growth options.

India's Financial Express yesterday reported Telstra was among a slew of international bidders for 3G spectrum in that country, which would allow it to enter the wireless broadband market.

This would represent an intriguing strategic move for Telstra. Frustrated by local regulations, it exited its 49 per cent stake in Modi Telstra in 2000.

This is not the first time this year that Telstra has been linked to a possible investment in India. In February, Malaysia's Maxis Communication contacted Telstra to see whether it was interested in buying about 20 to 25 per cent of Indian telecom operator Aircel for up to $US2 billion. Telstra did not bite.

The market might not be pleased if Telstra chose to return to India.

Citi analysts last month argued Telstra should exit all of its overseas investments and said they would strongly advise management against trying to expand its offshore assets in the pursuit of growth.

Meanwhile, some other operators are not finding the going easy in the Indian market.

In response to a query about its recent share price decline, SingTel yesterday said increased competition in the Indian market, which would affect its 30 per cent stake in Bharti Airtel, could be to blame.

DAM BUSTER

The temporary closure of the primary haulage shaft at Olympic Dam is bad news for BHP Billiton, but it is likely to prove a boost to rival uranium producers.

Olympic Dam represents only about 1 per cent of the world's copper production but it accounts for nearly 10 per cent of global uranium production.

In the past, when BHP has not been able to meet production quotas at Olympic Dam, it has been forced to buy uranium on the spot market to ensure deliveries.

Depending on the length  which Goldman Sachs JBWere said could be six months if the ore skip fell down the shaft  the outage could have a substantial effect on the thinly traded uranium spot market, and so the price of yellowcake.

Based on trading yesterday, investors are betting the reduced production from Olympic Dam will prove a boost to the uranium spot price, currently $US43.50 a pound.

The beneficiaries of any price rise would be existing producers, rather than the larger horde of hopefuls.

BHP, Rio Tinto, Energy Resources of Australia and Paladin Energy are the only Australian-listed companies with current uranium production. The latter two have by far the higher exposure to uranium prices. Yesterday, ERA shares rose 4 per cent and Paladin shares 6 per cent.

Interestingly, shortly before BHP revealed the problems at Olympic Dam, Canada's Mega Uranium said it planned to raise funds to help progress its Lake Maitland project in Western Australia.

The final size of the raising has not yet been determined but the BHP hiccup is unlikely to hurt Mega's chances of filling its coffers.

jfreed@smh.com.au