Sydney  - Shares in Australian investment bank Babcock and Brown plunged a further 23 per cent Friday as managers of the former stock market darling announced they would meet lenders in the next few days.

Shares in the country's second-largest investment bank fell 28 per cent Thursday and are now trading at around one-sixth of their valuation before the debt crisis hit a year ago.

B and B signed a refinancing deal with its major lenders, the Bank of Scotland being the most prominent among them, in March. It is now trading below a capitalization threshold figure that allows bankers to call for a review of 2.8 billion Australian dollars (2.6 billion US dollars) of debt.

"Reaching the market capitalization level does not in itself trigger any requirement to pay the debt or accelerate the repayment of the debt," B and B chief executive Phil Green said in a statement Thursday.

B and B's business model is to borrow from banks to buy infrastructure assets and pay dividends from the income derived from running them. As with other similarly structured firms, it's obliged to pay dividends from capital if its assets underperform.

"That, of course, produces some pressures on the company," ABN AMRO Morgans adviser Bill Bishop told the national broadcaster ABC. "Once it gets difficult to pay out the money, it probably means the company is short of money, and then the market smells blood in the water, and people start to sell their shares, and they see people selling shares, and they sell shares."

Speculation that B and B would fold was leavened by its market performance with its stock closing the week off its intraday low. The company will be hoping that bargain hunters enter the market next week in the belief that the company has hit rock-bottom. (dpa)