BABCOCK & Brown Infrastructure's reincarnation as Prime Infrastructure Group last year has not helped ward off previous ills.
Yesterday, it was hit with a $71.3 million tax bill over the acquisition of ARG Group in 2006.
The West Australian Office of State Revenue wants $71.3 million in stamp duty from Prime Infrastructure relating to the ARG acquisition where Queensland Rail acquired the ''above-rail'' assets while Babcock & Brown acquired the tracks. The assets, acquired for $853.5 million, were then rolled into BBI.
Prime Infrastructure changed its name from BBI late last year to remove any association with Babcock & Brown, which collapsed with debts of $3.3 billion.
Before the name change, BBI raised $1.5 billion to avoid collapse.
Prime Infrastructure said yesterday it would vigorously challenge the tax assessment.
The company, which has until February 5 to pay the bill, said its exposure would be limited to $46.4 million due to a $24.9 million indemnity from Queensland Rail.
Prime Infrastructure's chief financial officer Jonathon Sellar said the tax bill would not affect its guidance for a 7.5¢-a-security distribution for the quarter ending on March 31.
The company, which flagged the potential tax bill in its product disclosure statement in October, faces reviews of other transactions that could lead to further tax bills totalling $20 million. But indemnities will reduce any potential impact to no more than $6 million, Prime said.
Prime Infrastructure shares closed down 29¢ at $3.86.
