BBI - Babcock & Brown Infrastructure

[banska bystrica]

I am wondering if BB took advantage of the BBI rise, sold out and picked up BEPPA before the jump....

I did as per my stated plan. I sold enough BBI today to cover my previous purchases of BEPPA between 8 and 9c. I actually did even better than that. The result today was I sold 924,000 BBI to cover the prior purchase of 1M BEPPA. I'll do the same tomorrow if the volume and price are still there. I'm now holding more BEPPA than BBI (ratio 5:3).

 

[Mitsimonsta]

Watch it go!

Dampier-Bunbury pipeline refinanced, and PD Ports sale extended to June 30.

12c... go go go go!

 

[investorpaul]

Watch it go!

Dampier-Bunbury pipeline refinanced, and PD Ports sale extended to June 30.

12c... go go go go!

More good news, the big move will be once a sale is complete.

In hind sight I should have picked up some more last week, i think the best one could hope to pick them up from here on in is 10.5c (if and when it dips)

 

[Mitsimonsta]

It's all related to the SPARCS conversion.... if they can get the BBI SP to 20c (from 10c) before conversion, then they only half the number of shares need to be issued, and it's only ~100M shares which dilutes current BBI holders much less than 200M shares.

I fully expect a "Many buyers interested in sale of DBCT, BBI expects an excellent return for BBI holders' type release about 2 days before conversion.

 

[banska bystrica]

I don't believe it has anything to do with SPARCS. I would bet London to a brick BBI have the numbers to get a YES vote passed in May.
This rally is all about BBI being "less risky" and therefore more people willing to buy them. Very few wanted them in November at 2.5c. That's why those of us who believed in our plan and research were granted an early Christmas present.
This stock will remain in the toilet at sub 20c until we see corporate debt reduced substantially. The only way for that to happen is for DBCT to be sold for $2.5Bn+. Only two months to wait.

 

[Mitsimonsta]

I don't believe it has anything to do with SPARCS. I would bet London to a brick BBI have the numbers to get a YES vote passed in May.

Current conditions make me think that BBI would not put a vote forward unless they thought they had the numbers secure.

This rally is all about BBI being "less risky" and therefore more people willing to buy them. Very few wanted them in November at 2.5c. That's why those of us who believed in our plan and research were granted an early Christmas present.

So you look at the DBP refinancing as a vote of confidence from the credit market which has buoyed the equity?

I only wish I had known about this company at Christmas and got in at under 4c....

This stock will remain in the toilet at sub 20c until we see corporate debt reduced substantially. The only way for that to happen is for DBCT to be sold for $2.5Bn+. Only two months to wait.

This one is not in the toilet as far as I am concerned. +53% on average buy for me right now..... and there's another $1K owing in deferred distributions. I have only put $2K in thus far (25,177@ 7.9c avg), so I am very happy with the current SP although looking forward to a fall so I can buy more!

The SP after June 30 is going to be solely based on the DBCT sale figure. The higher the $$$, the greater the SP.

 

[investorpaul]

so I am very happy with the current SP although looking forward to a fall so I can buy more!

How much do you really see it falling, I personally don't think we will see BEPPA at sub 10c again (unless there is a bad announcement).

I have a buy order in now at 10.5c but dont hold too much hope of getting it filled.

 

[wesleysnipesjr]

It's all related to the SPARCS conversion.... if they can get the BBI SP to 20c (from 10c) before conversion, then they only half the number of shares need to be issued, and it's only ~100M shares which dilutes current BBI holders much less than 200M shares.

Aren't there 146.2 million SPARCS with face values of $1? If so at BBI's current SP full conversion would result in significant dilution.

 

[fuzzie]

With the issue of BBI being perceived less risky now, how does this affect the preference to holding either BBI or BEPPA? I hold BEPPA in a SMSF and have no issue about making a decision about swapping later because I have any capital gain issues in those circumstances under control. However on Monday, when BBI shot up and BEPPA was left behind, I made an on the fly decision to swap some BBI held outside super for BEPPA. I'm now reworking the figures and not sure that was the wisest move. From now on any swap between BEPPA and BBI outside of super is going to incur CGT for me.

Given the assumption BBI is not going to fail, I can value BEPPA reasonably easily, what I can't model is what the BBI price is going to target. With more market confidence in BBI, I can see BEPPA going back to around 70c with the current interest rate, however I could easily imagine BBI going back to 70c also, if a distribution around 7c were reinstated (but when?)

If I continue to hold BEPPA risk is lower, interest is compounding and any reinstated interest is 100% taxable. If I swap later to BBI the CGT would apply to the around 60c(or 30c depending on when) gain but the BBI dist would be presumable tax free for a while. If I swap earlier less CGT involved but dists likely to be in capital gain territory earlier. BBI under that scenario is looking an increasingly better option. I think I maybe did the wrong thing Monday

I wonder when distributions are likely to be reinstated, given all positive outcomes for asset disposals and then getting SPARCS out of the way?

 

[Mitsimonsta]

How much do you really see it falling, I personally don't think we will see BEPPA at sub 10c again (unless there is a bad announcement).

I have a buy order in now at 10.5c but dont hold too much hope of getting it filled.

Depends how we close today. I can see it coming back to 11c for support, but leave that order in because you never know. I'd be ecstatic to get a buy through at 10.5c now.

The last few days have been a bit up and down, big movements in intra-day prices. Opportunities are there if you can strike them.

Aren't there 146.2 million SPARCS with face values of $1? If so at BBI's current SP full conversion would result in significant dilution.

There's requests for ~25.8M units to be converted... http://www.bbinfrastructure.com.au/media/412579/sparcs conversion requests withdrawal right.pdf

I was referring to current requests for conversion, not a full conversion. That is not due for a while yet. The main thrust of my comment was to highlight the fact that if BBI can hype the SP up with good news releases, then the dilution that occurs with the conversion requests already on the table is much lessened.

Some investors will take the cash option at full conversion, there may be a premium of around 3-4% to encourage them to do so and keep dilution at a minimum when it does occur.

I wonder when distributions are likely to be reinstated, given all positive outcomes for asset disposals and then getting SPARCS out of the way?

It's the Billion Dollar Question..... I think they will hold BEPPA distributions until maturity or EPS reset terms are proposed and voted upon in favour. My opinion only.

 

[investorpaul]

Depends how we close today. I can see it coming back to 11c for support, but leave that order in because you never know. I'd be ecstatic to get a buy through at 10.5c now.

The last few days have been a bit up and down, big movements in intra-day prices. Opportunities are there if you can strike them.

Ive upped my bid to 11cents, I dont see it hitting 10.5 and im happy to pay a bit more.

If the transaction goes through it ill give me an avg price of 9 cents. And i will have approx 2 BEPPA for every 1 BBI.

Initially I started buying BBI/BEPPA on a very spec basis and put a third of what I normally would put into a share. I have now slowly increased my initial $ investment to that which I put into all stocks.

 

[Mitsimonsta]

Ive upped my bid to 11cents, I dont see it hitting 10.5 and im happy to pay a bit more.

Looks like you may get your wish, I see trades going through at 11c... there's not very many available at that price though...

EDIT: Buy side out of orders at 11c.... still 43K units at 11c remain and another 95K at 11.5c
Next two buy orders at 10.6 and 10.5c respectively, small numbers though. 100K units bid at 10.1c.

 

[awg]

The gap on BBI v BEPPA has closed up to 0, so I am happy with grabbing another 100k of Beppa on the bell at 10.5c

does knock my average price up a fair bit up

but unless we see a big down for the market, may have got some value

perhaps Pairtrader should run his program over this pair

would have done well out of it recently!

 

[Largesse]

well it would seem as if i'm not going to my cheap entry.

somethings definitely up, i'm more than happy to jump on the freight train if it getsa'movin

 

[nathanblack]

i too added another $5k at 10.5cents and noted the closing prices. provided wallstreet does ok overnight u would expect beppa to regain its usual 2.5c or so advantage. i expect 12c to be on offer tommorow but im wanting more long term.

the other thing i noticed was a few trades at 10.3cent and similar but when i tried placing at 10.4 i wasnt allowed. must be ,5 intervals. is this an asx rule or comsec? how did some go through at 10.3?

 

[investorpaul]

My order went through at 11cents.

If i didn't have to leave the office I would have been able to keep my order at 10.5c but I would rather be safe and pick them up at 11c than miss out entirely.

Avg price for BEPPA is now 0.086c and BBI still 0.071 which i am happy with.

It was interesting to see BBI and BEPPA both close at 10.5c. If BBI can hold above 10c in early moving trade tomorrow BEPPA should at least have a margin of 1.5 to 2c ie (be priced at 12 to 12.5 cents).

 

[hardyakka]

i too added another $5k at 10.5cents and noted the closing prices. provided wallstreet does ok overnight u would expect beppa to regain its usual 2.5c or so advantage. i expect 12c to be on offer tommorow but im wanting more long term.

the other thing i noticed was a few trades at 10.3cent and similar but when i tried placing at 10.4 i wasnt allowed. must be ,5 intervals. is this an asx rule or comsec? how did some go through at 10.3?

I have jumped in to get another block at 10.5. The differential between BBI and BEPPA is minimal, so tomorrow I would expect the margin to open up to about 2 cents, lets hope it is in an upward direction.

The announcements re refinacing, extension of deadline and SPARCS actions are all very positive. To me they indicate that a few banks are beginning to appreciate what the BBI business really is, there is interest in its unregulated (and hence from the BBI perspective riskier) assets and that management is managing the SPARCS issue.

All big positives in my books.

Cheers

 

[jeffTH]

i too added another $5k at 10.5cents and noted the closing prices. provided wallstreet does ok overnight u would expect beppa to regain its usual 2.5c or so advantage. i expect 12c to be on offer tommorow but im wanting more long term.

the other thing i noticed was a few trades at 10.3cent and similar but when i tried placing at 10.4 i wasnt allowed. must be ,5 intervals. is this an asx rule or comsec? how did some go through at 10.3?

The last sales at 0.103 were mine for 947 out of 50k. I now stand first in line for the remaining 49053 at 0.103. I guess I will sit on it for a while and then may have to up the ante to get the rest.
I am puzzled as to why Nathan couldn't enter a buy for 10.4cents as at this level increments are at 0.001 cents!

 

[nathanblack]

thanks for your insight jeff. maybe its a comsec thing or because i have normal trading account not a prefered one. i pay a huge 29.95 per trade. but i thought 0.1 was allowed till now. anyone can confirm why ? not that im dissapointed. 10.5c is fine with me, probably wouldnt get them at 10.4

cheers

 

[banska bystrica]

The BEPPA seller who dumped 5M on the close also had another 5M showing and withdrew it. I would say you guys are a big chance to get some BEPPA cheap whilst they have plenty to sell. It all depends on what BBI does on opening.