Alberta P3 school builder has high debtSep 18, 2008 03:38 PM
CALGARY - The company hired by the Alberta government to build and operate 18 schools has been criticized by investors groups for holding too much debt.
According to the Financial Times, Brown & Babcock recently laid off one-quarter of its staff after losing billions in investments. The Times reports analysts are concerned with the company's 'exposure to overleveraged satellites.'
Bloomberg news reports Brown & Babcock is the third worst performer on the MCSI global stock index. Only Fanny Mae and Freddy Mac rank lower.
CUPE Alberta President D'Arcy Lanovaz says the high debt load of Brown & Babcock highlights the problem with leasing schools from the private sector instead of traditional financing.
"In the current credit crisis, the Alberta Government has set itself up with a company that could walk away from eighteen schools in mid construction," said Lanovaz. "Or, if the company fails down the road, who knows who will end up operating the schools we send our children to."