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your analysis is most welcome afaic.
does assist in illuminating various aspects
the fact u r an enthusiastic owner is not really very secretive
BBI - Babcock & Brown Infrastructure
- Thread starter roland
- Start date
your analysis is most welcome afaic.
does assist in illuminating various aspects
the fact u r an enthusiastic owner is not really very secretive
Mate,
You've developed a cult following based on your informative posts, its not hard to see why your the biggest target for the down rampers and sh*t stirrers.
I shudder to think about the quality of discussion across the road with dargie and co. at the helm though....
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The squeeky wheel gets all the oil, and someone must have had a big whine. Perhaps they don't know the difference between one being passionate and one intentionally up ramping a stock.
Personally I have found your posts informative and they have helped me in my decisions.
I hope common sense prevails.
On a side note, what are the thoughts of everyone re BBI's current SP? Given the news on Friday I thought it would have had a similar run to HFA...well perhaps not 100% gain but maybe ongoing 20% gains.....? My reasoning is that BEPPA shot up quite well over the few days, obviously buyers thinking BBI may be able to pay their debt, i though this confidence would also transfer more strongly to the BBI SP
I'll be watching to see if the US markets continue their rally, now that will make things interesting!!!
Personally I have found your posts informative and they have helped me in my decisions.
I hope common sense prevails.
On a side note, what are the thoughts of everyone re BBI's current SP? Given the news on Friday I thought it would have had a similar run to HFA...well perhaps not 100% gain but maybe ongoing 20% gains.....? My reasoning is that BEPPA shot up quite well over the few days, obviously buyers thinking BBI may be able to pay their debt, i though this confidence would also transfer more strongly to the BBI SP
I'll be watching to see if the US markets continue their rally, now that will make things interesting!!!
I had heard that the "Other site" is not up to the quality of this one and BB's comments seem to support that.
We can only hope that this is a sustainable rally of the markets, i was toying with increasing my BEPPA holding , but looks like its a bit late,
It would be good to see BBI begin to recover as well..
cheers to all for their informed comments, especially BB who's insightful analysis is indeed appreciated across the forum
cheers
mark W
We can only hope that this is a sustainable rally of the markets, i was toying with increasing my BEPPA holding , but looks like its a bit late,
It would be good to see BBI begin to recover as well..
cheers to all for their informed comments, especially BB who's insightful analysis is indeed appreciated across the forum
cheers
mark W
Hmmm..carp...very very fishy if you ask me...but then maybe the mods across the way are dux-lix-ic
You are wasted over there BB
Totally agree Mark. I was banned for asking a power mad mod an simple and polite question. I have not missed the other side in the least and consider the posts here of a much higher quality and standard.
BB, dont you think the other side will be mildly irritated when readers desert that forum to read your posts here
.Mind you I really do miss the occasional laugh I got from the death spirals as the stock price crashed to earth...never did ask what would happen if you jumped with a parachute in the momentum of a death spiral...my life is incomplete
.Cheers
I imagine you're referring to the forum known as the "pre-war, old-fashioned washing tub".
I tried to join there once and was knocked back because my email address was too blue-collar for them.
In retrospect, based on my later experience with ASF, it was their loss and my gain.
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Just looking today at the free cash flow forecasts from ABN Amro who are basically neutral on BBI. They have a value of $1.00 per BBI but target price of 5c??? Go figure that one. Sounds like the analyst has put up the white flag.
Anyway, the following are his conservative Free Cash Flow forecasts for 2009, 2010 and 2011:
2009: $183.5M
2010: $267.2M
2011: $314.5M
Now this includes DBCT with figures of $73.3M, $105.7M and $109.3M respectively.
So, a 100% sale of DBCT would pretty much clear corporate debt and leave the remaining assets with FCF of $161M in 2010 and $205M in 2011.
Interest savings on corporate debt alone would be in the order of $90M per annum. This would add back into the FCF so in 2010 you would have FCF of $251M and 2011 would produce FCF of nearly $300M. A corporate debt free BBI producing $300M per annum of FCF from 2011 would be a very highly sort after company re: instos. That's why this stock is a serious chance of being a 20 bagger by 2011.
Anyway, the following are his conservative Free Cash Flow forecasts for 2009, 2010 and 2011:
2009: $183.5M
2010: $267.2M
2011: $314.5M
Now this includes DBCT with figures of $73.3M, $105.7M and $109.3M respectively.
So, a 100% sale of DBCT would pretty much clear corporate debt and leave the remaining assets with FCF of $161M in 2010 and $205M in 2011.
Interest savings on corporate debt alone would be in the order of $90M per annum. This would add back into the FCF so in 2010 you would have FCF of $251M and 2011 would produce FCF of nearly $300M. A corporate debt free BBI producing $300M per annum of FCF from 2011 would be a very highly sort after company re: instos. That's why this stock is a serious chance of being a 20 bagger by 2011.
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Banksa,
Once again great info and sounds very positive indeed. I like your enthusiasm and positivity. Not trying to be a smart @r$e here, but what negatives do you see for BBI. Worse case scenarios? Speculation of course.
Are the figures that you qoute flexible? Could things change for BBI if the "crisis" worsens or prolongs?
It was only a few months ago that Bell & Potter Research were recommending BBI as a buy at 10cents but I have not heard any recommendations since.
2011 seems like a long way away in the unpredictable market place.
Keep up your posts!
Once again great info and sounds very positive indeed. I like your enthusiasm and positivity. Not trying to be a smart @r$e here, but what negatives do you see for BBI. Worse case scenarios? Speculation of course.
Are the figures that you qoute flexible? Could things change for BBI if the "crisis" worsens or prolongs?
It was only a few months ago that Bell & Potter Research were recommending BBI as a buy at 10cents but I have not heard any recommendations since.
2011 seems like a long way away in the unpredictable market place.
Keep up your posts!
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The risk is that BBI cannot sell DBCT and/or PD Ports at prices big enough to eliminate or pay off the majority of corporate debt.
This depends on the GFC to some extent and the flow of credit. If credit loosens up in the next two months, then some of those companies who are currently in the BBI data room will find it easier to access the money to buy the assets.
It was mentioned in the press that Xstrata are a serious contender. If so, they have the cash. No need for borrowings.
It really is hard to imagine BBI would not receive a very good offer for DBCT. It would rank ahead of Powerco and Euroports by a fair margin and those assets were able to be sold during the GFC at prices above book value.
The data room is open for the serious potential buyers of DBCT. They would be getting access to all the relevant documentation and going over it with a fine tooth comb.
DBCT's forecast EBITDA for 2010 is $224M. Remember it is regulated so it's pretty well locked in. EBITDA x11 would give a price of $2.5Bn. Debt owing on DBCT is $1.6Bn. That would clear $900M of corporate debt.
Asciano are valuing their ports at EBITDA x12 so DBCT at 11X is cheap. It's probably one of the best coal terminals in the world.
Now if BBI got EBITDA X13, that would clear $1.3Bn of corporate debt. Mouth watering figures.
This depends on the GFC to some extent and the flow of credit. If credit loosens up in the next two months, then some of those companies who are currently in the BBI data room will find it easier to access the money to buy the assets.
It was mentioned in the press that Xstrata are a serious contender. If so, they have the cash. No need for borrowings.
It really is hard to imagine BBI would not receive a very good offer for DBCT. It would rank ahead of Powerco and Euroports by a fair margin and those assets were able to be sold during the GFC at prices above book value.
The data room is open for the serious potential buyers of DBCT. They would be getting access to all the relevant documentation and going over it with a fine tooth comb.
DBCT's forecast EBITDA for 2010 is $224M. Remember it is regulated so it's pretty well locked in. EBITDA x11 would give a price of $2.5Bn. Debt owing on DBCT is $1.6Bn. That would clear $900M of corporate debt.
Asciano are valuing their ports at EBITDA x12 so DBCT at 11X is cheap. It's probably one of the best coal terminals in the world.
Now if BBI got EBITDA X13, that would clear $1.3Bn of corporate debt. Mouth watering figures.
Lucky_Country
Formerly known as ijh
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I wonder what BHP would be doing with the $3 billion or so its just raised ?
They may like DBCT for there increased tonnage and be the operator !
They may like DBCT for there increased tonnage and be the operator !
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It boils down to this:
If BBI can sell DBCT for $2.5Bn or better, they are out of the woods. BEPPA are then virtually guaranteed to be worth $1+ accumulated interest in 2012. They will always trade at a discount to face value but I would have thought 60c-70c for BEPPA is a very realistic target so long as corporate debt is all but eliminated.
Maybe the asset sales will be a combination?
1. 100% DBCT and no other sales
2. 100% PD Ports and 50% DBCT
If BBI can sell DBCT for $2.5Bn or better, they are out of the woods. BEPPA are then virtually guaranteed to be worth $1+ accumulated interest in 2012. They will always trade at a discount to face value but I would have thought 60c-70c for BEPPA is a very realistic target so long as corporate debt is all but eliminated.
Maybe the asset sales will be a combination?
1. 100% DBCT and no other sales
2. 100% PD Ports and 50% DBCT
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Hi banska bystrica,
I just wanted to let you know that I also enjoy reading your posts and I appreciate the time and effort you take to contribute as much as you do. If neither the other forum nor its users appreciate you then don't waste your time with them and just deal with this forum full-time instead where you are obviously highly thought of and valued.
To add to your post about a combination of asset sales wouldn't BBI consider selling 100% of both PD Ports and DBCT if the price was right? If such an outcome was to be reached what would the likely pay off be re: corporate debt being eliminated vs revenue and future growth?
I just wanted to let you know that I also enjoy reading your posts and I appreciate the time and effort you take to contribute as much as you do. If neither the other forum nor its users appreciate you then don't waste your time with them and just deal with this forum full-time instead where you are obviously highly thought of and valued.
To add to your post about a combination of asset sales wouldn't BBI consider selling 100% of both PD Ports and DBCT if the price was right? If such an outcome was to be reached what would the likely pay off be re: corporate debt being eliminated vs revenue and future growth?
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Yes I think anything and everything is for sale at the right price. PD Ports however has huge growth potential. Tees Port (PD Ports) is located about 5km to the east of Middlesborough in the North East of England.
http://www.maplandia.com/united-kingdom/england/north/redcar-and-cleveland/teesport/
http://www.maplandia.com/united-kingdom/england/north/redcar-and-cleveland/teesport/
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I would be very interested to see a ranking of BBI's assets from most valuable to least valuable, factoring in future growth, in your opinion, and which assets you would like to see sold down or sold completely and which assets you would like to see remain intact across the entire asset portfolio.
From a personal viewpoint I would like to see BBI retain its full ownership of PD Ports and WestNet Rail whilst getting rid of DBCT altogether, but I understand the need to sell off assets so either a full sale or a sell-down of these assets to a 25% or 50% ownership level might be on the cards, provided they can find buyers for these assets that is!
From a personal viewpoint I would like to see BBI retain its full ownership of PD Ports and WestNet Rail whilst getting rid of DBCT altogether, but I understand the need to sell off assets so either a full sale or a sell-down of these assets to a 25% or 50% ownership level might be on the cards, provided they can find buyers for these assets that is!
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From one of my spreadsheets:
Asset, Asset Ranking, Net equity
NGPL: 1, $1.3Bn
DBCT: 2, $800M
AETD: 3, $700M
PD Ports: 4, $500M
Euroports: 5, $400M
IEG: 6, $350M
Westnet: 7, $300M
Powerco: 8, $300M
Cross Sound Cable: 9, $50M
In my opinion the riskiest assets would be Euroports, PD Ports, Westnet Rail. These have the potential to suffer the most in a deep recession.
Asset, Asset Ranking, Net equity
NGPL: 1, $1.3Bn
DBCT: 2, $800M
AETD: 3, $700M
PD Ports: 4, $500M
Euroports: 5, $400M
IEG: 6, $350M
Westnet: 7, $300M
Powerco: 8, $300M
Cross Sound Cable: 9, $50M
In my opinion the riskiest assets would be Euroports, PD Ports, Westnet Rail. These have the potential to suffer the most in a deep recession.
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I agree with you re: the riskiest assets being Euroports, PD Ports and WestNet Rail, but just as they have the potential to suffer the most in a deep recession they have the potential to gain the most during a period of strong economic growth, so provided BBI is able to hold onto them, their long-term future looks bright.
Sale process for DBCT was being handled internally?
From today, Macquarie Cap has been employed by BBI to carry forward the sales process. Does this mean BBI is finding the process more difficult than it first thought? or does this mean a sale is now even more likely?
Source: Street Talk
From today, Macquarie Cap has been employed by BBI to carry forward the sales process. Does this mean BBI is finding the process more difficult than it first thought? or does this mean a sale is now even more likely?
Source: Street Talk
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I would speculate they are having trouble selling. Why else would you want to pay Mac Cap a commision on the sale when you are trying to get every last dollar out of that asset?
Looking at the BBI SP today it appears there is a lot of interest in buying those shares but looks like most of that interest is below the $0.05cent mark.
Looking at the BBI SP today it appears there is a lot of interest in buying those shares but looks like most of that interest is below the $0.05cent mark.
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You're entitled to speculate on whatever you want to.
There are multiple serious buyers in the BBI Data Room. Xstrata has been in talks with BBI for nearly a year. To those who think BBI are going to have trouble selling DBCT, I suggest you sell your shares because if DBCT cannot be sold, BBI are in trouble.
PS. I'm in the buy queue waiting for your shares.
