BBI - Babcock & Brown Infrastructure

[bellenuit]

Does this write off some of their debt? Or does it write off the debt of its subsidiary?

As I understand it, it writes off all the asset level (non-recourse) debt for that asset. How much cash was left over after that was not disclosed.

 

[hardyakka]

Hi fellow death spiral investors!

Warning....warning...warning...do not take the DEATH SPIRAL in vain...we know where you live

The Dalek death spiral overlord will pay you a visit..your only chance of survival is a healthy dose of beans and beer.

Now where did I put my tablets...

 

[investorpaul]

Hi fellow death spiral investors!

What is everyone's opinion regarding BBI's announcement relating to the 100% sale of GASCAN? Does this write off some of their debt? Or does it write off the debt of its subsidiary?

Note: There is a thread on this site called best and worst stocks of 2008, BBI rates an honourable mention as the worst.

Good for all those who wish to buy cheap!

By todays market activity it looks like this annoucement was pretty insignificant in the scheme of things.

What it does detail however is the ability for transactions to continue to take place even with the financial crisis still in full swing.

In my opinion the announcement did not shed much light on the price achieved or its ability to pay down additional company debt. I believe this may highlight that the transaction merely paided off debt associated with that particular asset. (perhaps someone else has additional info)

Any debt reduction is good in my opinion (even if it is asset specific), furthermore by reducing holdings in smaller or non core assets, greater focus can be given to the big picture.

* disclaimer - I hold BBI and hope to pick up some BEPPA this week

 

[select]

bellenuit,
Good post and I'll deal with those questions later.

select/macrae12,
Still waiting for some factual evidence that BBI is a dog of a stock with no future. Waiting with baited breath......still waiting.

BB,

I don't quite understand why you would attempt to associate me with another person but perhaps that is a guide to your research or more to the point, your desperation.

What I do find Intersting is that you dealt with my post before you dealt with BELLENUIT'S post. Bellenuit is still waiting for a reply.

It's also not appropriate to continually refer to another chat site.

I stand by my comments.

 

[banska bystrica]

select/macrae12,

I will deal with bellenuit's post in a private PM tomorrow. What are your motives on this forum other than to bag BBI without factual evidence? I am still waiting for your factual evidence that justifies a 95% discount to NAV.
If you don't provide evidence by close of trade tomorrow, any future posts by you will be ignored by myself.
As for your reference to my "desperation", I sleep very easy at night Mr macrae12/select. I am a cool head and look upon these prices as golden opportunities to buy BEPPA at give away prices. Once DBCT is sold, you will not be able to buy BEPPA anywhere near 6.6c.
I bought 300,000 BEPPA today at 6.9c and happy to do so.

 

[dhukka]

From today's announcement:

Explorer has agreed to acquire a 100% interest in Gascan and its subsidiary. The net transaction proceeds will be applied to repayment of IEG asset level debt and repays the debt associated with Gascan in full. The transaction results in an accounting loss on sale of approximately €13 million.

Interesting, I seem to remember quite a few BBI cheerleaders claiming that none of their assets need to be written down because they didn't overpay.

 

[banska bystrica]

From today's announcement:



Interesting, I seem to remember quite a few BBI cheerleaders claiming that none of their assets need to be written down because they didn't overpay.

The Fundamental Analyst???

Your signature is very questionable dhukka. That asset is so insignificant it doesn't even register on the radar. Do you understand the difference between an accounting loss and a cash loss? When you work that out, please rejoin the debate. Until then, please do some financial analysis homework. It is very frustrating trying to debate facts with people who are have such limited knowledge. That is one problem with share forums. Every poster has a different level of knowledge and for those that have done hundreds of hours of research it is a source of much frustration.

Would anyone be interested if I started a BBI blog? All views welcome so long as there is factual supporting evidence.

 

[nomore4s]

The Fundamental Analyst???

Your signature is very questionable dhukka. That asset is so insignificant it doesn't even register on the radar. Do you understand the difference between an accounting loss and a cash loss? When you work that out, please rejoin the debate. Until then, please do some financial analysis homework. It is very frustrating trying to debate facts with people who are have such limited knowledge. That is one problem with share forums. Every poster has a different level of knowledge and for those that have done hundreds of hours of research it is a source of much frustration.

Would anyone be interested if I started a BBI blog? All views welcome so long as there is factual supporting evidence.

lol, I can't wait to see Dhukka's reply to that.

select/macrae12,
Still waiting for some factual evidence that BBI is a dog of a stock with no future. Waiting with baited breath......still waiting.

Well I have factual evidence BBI is a dog - see attached weekly chart says it all I think. But I won't say it doesn't have a future because that I don't know. It could make new all time highs one day or it might just trade between 2c-20c forever.
The good news for holders is from a T/A point of view it is building a solid base with volume coming in at the right places - one to watch for now.

 

[banska bystrica]

The chart indicates the share price performance is a dog. The question remains: Is the company fundamentally a dog and is it a buy or sell at 5c? The chart is evidence of misery for long term holders to date but it's the future we are interested in.

The facts as per the balance sheet support the notion it's a screaming BUY. That's the opinion I have formed through careful analysis of the assets, the debt, the future cash flows. My average is now 5.8c for BBI and that is lowering every time I arb between BBI and BEPPA. Not yet a dog for this investor. BBI and BEPPA have huge upside upon asset sales. BEPPA to me is almost a "lay down misere". Absolutely outstanding value at sub 7c and I continue to buy them.

 

[investorpaul]

BB i for one would definately be interested in reading a blog on BBI, its evident you have done a huge amount of research and anything you are willing to share is very much appreciated

 

[Viva_Las_Vegas]

Banksa,

I'm sure we would all agree that we enjoy your analysis and comments, But everytime someone questions the future of BBI or BEPPA payouts you seem to take it personally.

Most of us (I for one) are inexperienced when it comes to the stock market, and although BBI looks like it has good assets etc we all have our doubts at times. The volatility of the markets doesn't help either, and to give an example if GM motors in the USA can be on the brink of bankruptcy then no company is safe(I do realise they are totally different comanies).

Although as you have mentioned and I agree.....the reward vs risk in this one is appealing.

Yesterday I posted some qoutes from an article where DBCT is estimated to be worth $1b far greater than the $250b you stated earlier, this sounds promising if correct.

I urge you to keep up your posts and keep forwarding both positive and negative info regarding BBI and BEPPA and don't lose your patience. We are all here to share and learn.

 

[alphaman]

The good news for holders is from a T/A point of view it is building a solid base with volume coming in at the right places - one to watch for now.

A base normally offers a chance of upside breakout, but it's not very meaningful when the base is sitting above the zero line. Price cannot go negative, so any dog (or hidden gem) has to pause above zero.

 

[Viva_Las_Vegas]

Sorry my bad, 2.5bn then. I was going off memory. Regardless if you look through yesterdays posts you will find the article I am referring to where they say DBCT COULD be worth $1bn if the buyer was willing to take on the debt that comes with it.
Have a read and share your thoughts. There is obviously a difference is projected values. Did you get your value from the BBI investor pack or some other source BB?

 

[investorpaul]

Banksa,

I'm sure we would all agree that we enjoy your analysis and comments, But everytime someone questions the future of BBI or BEPPA payouts you seem to take it personally.

Most of us (I for one) are inexperienced when it comes to the stock market, and although BBI looks like it has good assets etc we all have our doubts at times. The volatility of the markets doesn't help either, and to give an example if GM motors in the USA can be on the brink of bankruptcy then no company is safe(I do realise they are totally different comanies).

Although as you have mentioned and I agree.....the reward vs risk in this one is appealing.

Yesterday I posted some qoutes from an article where DBCT is estimated to be worth $1b far greater than the $250b you stated earlier, this sounds promising if correct.

I urge you to keep up your posts and keep forwarding both positive and negative info regarding BBI and BEPPA and don't lose your patience. We are all here to share and learn.

Do you mean 2.5bn??? I think you missed the full stop ???

All up i read it as saying DBCT is worth 2.5bn however BBI will recieve $1bn as the company that buys DBCT will take over the debt of approx $1.5bn (1.5 + 1 = 2.5bn)

Maybe someone can shed more light on this

*disclaimer I hold BBI

 

[nomore4s]

A base normally offers a chance of upside breakout, but it's not very meaningful when the base is sitting above the zero line. Price cannot go negative, so any dog (or hidden gem) has to pause above zero.

lol, there appears to be some support around 2.5c-3.5c and prices can still halve from those levels. It is more the volume that has me most interested atm.

 

[Viva_Las_Vegas]

BB,

Further to your compelling arguements re BBI's asset worth members should have a read of this article

http://steelguru.com/news/index/200...nts_Macquarie_for_sale_of_flagship_asset.html

In particular one qoute "The company's situation has been worsened by the slump in its share price, which now values BBI at only USD 154 million. That is far below the value of its individual assets such as Dalrymple Bay and has ruled out any prospect of BBI raising new capital to pay back its USD 10 billion debt."

AND

"Analysts have estimated that Dalrymple Bay could be worth USD 1 billion if its own debt of USD 1.7 billion is excluded. But potential buyers will have to take on those borrowings as part of any sale of the whole facility."

This is the one I am referring to, analyse it, dissect it, pull it apart BB I am keen to find out why the differing estimates as to the price of DBCT.........us BEPPA holders are riding on this one.

 

[banska bystrica]

I said DBCT is worth EV $2.5Bn minimum which equates to $800M after debt. That is only $200M less than your quoted source of $1Bn which implies an enterprize value of $2.7Bn. We are both pretty much in the same ballpark.

 

[Viva_Las_Vegas]

I said DBCT is worth EV $2.5Bn minimum which equates to $800M after debt. That is only $200M less than your quoted source of $1Bn which implies an enterprize value of $2.7Bn. We are both pretty much in the same ballpark.

Ok, last time you referred to the $800m as corporate debt, running from memory that was the debt owed to BEPPA NZ and SPARCS right? The way I read the qoute from the article is that DBCT comes with debt. Either we have our wires crossed or perhaps my dyslexia is kicking in, but I am confused as to which debt belongs to who. I do realise that since BBI owns DBCT it has debt, but surely BBI's corporate debt is different to the debt of DBCT?????

Set me straight BB

 

[investorpaul]

I have just reviewed some previous posts on this whole debt issue and checked in the investor pack.

Below is a quote from BB

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

So if DBCT sells for $2.7bn (comprising of $1bn net proceeds and $1.7bn debt being taken over by the purchasing entity) BBI will have $1bn cash.

The investor pack states debt as being AUD $10.3 bn (excluding the westnet rail mezzanine debt). 14% of this debt is corporate debt (approx 1.4bn) Therefore the net proceeds from DBCT of $1bn (which are quoted in USD as per las vegas post) will pretty much cover the corporate debt.

*disclaimer I own BBI

 

[Mitsimonsta]

Great post Paul... very clear information contained therein.

I am just waiting for cash to buy BEPPA.