Babcock & Brown Wind Partners (BBW) has decided to cut fees to Babcock & Brown Ltd post the completion of review of its corporate governance. As part of the review, the company said base fees would be reduced and additional performance hurdles would be introduced for the payment of incentive fees.

Also, the company has decided to boost independent governance to distance itself from the parent, which is fighting to avoid defaulting on A$3.1 billion ($1.9 billion) of debt.

It is being said that the independent directors of BBW considered the reforms an important first step in strengthening BBW's corporate governance framework and improving BBW's management arrangements.

Under changes agreed between the two boards, the wind-power producer will also no longer have to exclusively use its parent's financial advisory services, the Sydney-based company known as BBW said in a statement. Babcock Wind should go further and sever all links with the parent, said Kairos Fund Ltd., which owns more than 10 percent of the company.

Babcock Wind will in future have an independent chairman and reduce the number of Babcock & Brown directors on its board to one from two. It will also separate its information technology systems from its parent. The changes will more closely align the interests of shareholders with those of management, the company said, according to Bloomberg.

In another development, Babcock & Brown, in conjunction with BBW, sold a portfolio of jointly owned wind farms in

Portugal to a consortium of investors led by Magnum Capital for an Enterprise Value of approximately €1.15 billion (A$2.23 billion). The portfolio comprises approximately 515MW of operating wind farms and a further 156MW of wind farms under construction. As part of the transaction and consideration, Babcock & Brown has also sold Magnum certain Portuguese wind energy service companies.