BBI - Babcock & Brown Infrastructure

[hardyakka]

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.

Its just too hard to resist. I have placed my order and will just keep my fingers crossed that someone wants to take a profit and offload their BEPPAs, preferably very cheap to me

Cheers

 

[investorpaul]

Both have opened up strongly again.

For BBI there is a heap of buyers at 10 and 10.5 cents so i cant see it dropping below that easily, but it also looks like people are lining up to sell at 11.5c + to take short term profits.

BEPPA is also at 11.5c so no gap yet (although there briefly was a gap of 0.5c at open).

 

[investorpaul]

I cant believe BEPPA was at a discount to BBI

BEPPA 10c

BBI 10.5c

very strange, it must be that guy BB mentioned who tried to shift 10m units

 

[mark_au]

Worked for me, I managed to swap some BBI for BEPPA at almost $0 changeover cost... , Quite a good day on the market. lets hope the momentum continues.. Australia is really doing quite well compared to other countries...

 

[investorpaul]

Another interesting day, opened strong and closed weak.

We will prob have to wait a while now (for more good news) before any more significant moves, I dont see any big move tomorrow.

Good on you Mark_au for swapping to 0 difference, that was good timing

 

[mark_au]

Another interesting day, opened strong and closed weak.

We will prob have to wait a while now (for more good news) before any more significant moves, I dont see any big move tomorrow.

Good on you Mark_au for swapping to 0 difference, that was good timing

Ahaha yea, thanks .. I was due have a win once in my 40 years ;-0
The market might shake a bit with the Chrysler news.. so see how we go.
hopefully the market can retain some momentum come monday

cheers

 

[fuzzie]

Interesting day today from my perspective, at least on how the system works.

I was watching the prices just after market close and noticed the buy and sell orders on beppa building after the close. I've always wondered how that works, today I found out.

Shortly before close I had a sell order unexpectedly go through on another holding. Shortly after close I was looking at beppa and noticed one buy at 10.5 with the nearest seller I think at 10.8, market in pre-open. I refreshed the quote page and there were several big buys for 10.5 a small sell at 10.5 and 1 mil at 10.5. There were more than 1 mil total buys, I refreshed again and there was another 1 mil sell order sitting there that would more than clear the 10.5 buys. I wondered, should I?, then place a buy order. A second later the market was in adjust and the buy was filled.

What I want to work out now is who places those trades you see go through on cent valued shares for 1 or 2 shares! Clearly not somebody who pays $29.95 miniimum brokerage.

 

[bellenuit]

I wondered, should I?, then place a buy order. A second later the market was in adjust and the buy was filled.

I thought the only orders that got executed after 4pm were broker to broker orders via telephone?

Pre CSPA

Between 4:00 pm and 4:10 pm, Sydney time, the market is placed in Pre-open. Trading stops and brokers enter, change and cancel orders in preparation for the market closing.

http://www.asx.com.au/resources/education/basics/trading_hours_asx.htm

 

[Mitsimonsta]

No, it's the closing price auction system. You can get trades going through then.

I grabbed some more BEPPA today as my stimulation came though. Grabbed at 10.5c which I am happy to pay. My average is now 8.36c/unit.

 

[nathanblack]

beppa seems to have found a support level at 10cent now, a previous pschycological barrier particularly on the closing bell. might trade between 10 and 12c range until some news is released god or bad.

im happy with the current price although the volumes seem a bit all over the place. i think its becoming less volatile and might attract a new kind of investor.

just wait for a sale of somekind now

 

[banska bystrica]

From Wilson HTM Ltd:

"The completion of the Euroports capital raising is critical for BBI. The funds raised are required to finance the put option that has been exercised by the minority investors in one of Euroports’ subsidiaries. Without the cash, the worse case scenario is a winding up of Euroports. Also, if the transaction does not complete then Euroports is obligated to refund the B&B European Infrastructure Fund its €35M deposit; however, BBI has stated that Euroports does not have sufficient cash to repay it.

As part of the 29.7% share subscription B&B European Infrastructure Fund, one of the two potential investors in Euroports, paid a refundable €35M deposit to Euroports, guaranteed by BBI and secured against the assets of Euroports. If the transaction does not complete BBI has stated that Euroports does not have sufficient cash to repay the deposit. Could there be a situation where one BNB fund sues another?!"

This has the potential to bring the BBI house of cards tumbling down.

 

[nathanblack]

beppa holding firm on low volume. bbi slightly down in a positive market on relatively low market. seems like sellers arent dropping the ask price to meet buyers.

looks ready to break. could go either way. i suspect both bbi and beppa might get an afternoon run up in line with market. certainly positive that there seems no selling pressure and both stock are holding on to recent gains.

perhaps the forming of a new base.

 

[nathanblack]

From Wilson HTM Ltd:

"The completion of the Euroports capital raising is critical for BBI. The funds raised are required to finance the put option that has been exercised by the minority investors in one of Euroports’ subsidiaries. Without the cash, the worse case scenario is a winding up of Euroports. Also, if the transaction does not complete then Euroports is obligated to refund the B&B European Infrastructure Fund its €35M deposit; however, BBI has stated that Euroports does not have sufficient cash to repay it.

As part of the 29.7% share subscription B&B European Infrastructure Fund, one of the two potential investors in Euroports, paid a refundable €35M deposit to Euroports, guaranteed by BBI and secured against the assets of Euroports. If the transaction does not complete BBI has stated that Euroports does not have sufficient cash to repay the deposit. Could there be a situation where one BNB fund sues another?!"

This has the potential to bring the BBI house of cards tumbling down.

interesting read. i havent seen any official company announcement today but perhaps its on its way and thats why we are seeing low volumes. be very interesting if the SP will hold post announcement.

in reality how bad would this worse case scenario be? all debt is recourse to asset level only. would this mean the winding up of euroports only? leaving bbi intact? how much do they need to raise for the put option versus the 35mil refund of deposit?

 

[investorpaul]

From Wilson HTM Ltd:

"The completion of the Euroports capital raising is critical for BBI. The funds raised are required to finance the put option that has been exercised by the minority investors in one of Euroports’ subsidiaries. Without the cash, the worse case scenario is a winding up of Euroports. Also, if the transaction does not complete then Euroports is obligated to refund the B&B European Infrastructure Fund its €35M deposit; however, BBI has stated that Euroports does not have sufficient cash to repay it.

As part of the 29.7% share subscription B&B European Infrastructure Fund, one of the two potential investors in Euroports, paid a refundable €35M deposit to Euroports, guaranteed by BBI and secured against the assets of Euroports. If the transaction does not complete BBI has stated that Euroports does not have sufficient cash to repay the deposit. Could there be a situation where one BNB fund sues another?!"

This has the potential to bring the BBI house of cards tumbling down.

BB just trying to get my head around the above quote.

Basically BBI needs to raise cash to pay for the put option otherwise two things will happen:
1. A wind up of Euroports
2. BBI will have to pay B&B Euro Infrastructure 35 m euros.

Is this correct?

If yes, have your views of BBI/BEPPA altered, will you take a more cautious approach going forward?

 

[boff]

From Wilson HTM Ltd:

"The completion of the Euroports capital raising is critical for BBI. The funds raised are required to finance the put option that has been exercised by the minority investors in one of Euroports’ subsidiaries. Without the cash, the worse case scenario is a winding up of Euroports. Also, if the transaction does not complete then Euroports is obligated to refund the B&B European Infrastructure Fund its €35M deposit; however, BBI has stated that Euroports does not have sufficient cash to repay it.

As part of the 29.7% share subscription B&B European Infrastructure Fund, one of the two potential investors in Euroports, paid a refundable €35M deposit to Euroports, guaranteed by BBI and secured against the assets of Euroports. If the transaction does not complete BBI has stated that Euroports does not have sufficient cash to repay the deposit. Could there be a situation where one BNB fund sues another?!"

This has the potential to bring the BBI house of cards tumbling down.

Hi BB,
Which BBI is being referred to here. The B&B European Infrastructure Fund was an unlisted B&B fund so I'm thinking it's the 'other' BBI.
Cheers.

 

[banska bystrica]

Make no mistake. The BBI is "our" BBI. BNB Infrastructure fund is one of the buyers of Euroports. If conditions precedent (CP) are not satisfied, they can pull the pin, demand their $70M deposit back (which BBI Euroports no longer has due to the bank sweep) and the minority interests can demand the exercise of the put option. Potentially very ugly indeed.
The liquidation of Euroports also has the potential to affect cash flow to the banks to pay down corporate debt. It all depends on how tough a line the banks want to take here. Whilst Euroports has no corporate debt, the potential for a domino effect is there.

 

[investorpaul]

Make no mistake. The BBI is "our" BBI. BNB Infrastructure fund is one of the buyers of Euroports. If conditions precedent (CP) are not satisfied, they can pull the pin, demand their $70M deposit back (which BBI Euroports no longer has due to the bank sweep) and the minority interests can demand the exercise of the put option. Potentially very ugly indeed.
The liquidation of Euroports also has the potential to affect cash flow to the banks to pay down corporate debt. It all depends on how tough a line the banks want to take here. Whilst Euroports has no corporate debt, the potential for a domino effect is there.

So to refinance this BBI needs to:

1. Refinance Euroports - However given the current financial environment and the uncertainty surrounding the business this could prove troublesome.
2. Sell other assets such as DBCT to help fund the Euroports division????

 

[banska bystrica]

BBI's corporate bankers are bleeding us dry here. Make no mistake. If DBCT doesn't sell for a big premium to book value, it will be a very difficult road ahead. The banks do not care about equity holders (BBI) or debt holders (BEPPA) other than themselves.
They lend you an umbrella when the sun is shining and when it rains they threaten to take it from you unless you pay much more interest. Disgraceful really.
We need to clear the corporate debt so we get the banks to let go of our necks.

 

[nathanblack]

i think euroports is too pressing to wait for an asset sale to bail us out. DBCT announcement not even due for a month, then IF its acceptabe there are due diligence, government/regulatory approvals, settlement , etc.

they need to think fast on this one and prove there management skills. refinancing eurorts through bank consortium or script are the only options. both will be difficult in this environment/time frame.

how do we analyse the outcome should europrts go into administration. what would be the process? sell the asset pressumable at a discount. where do the proceeds go?
does:
1. banks get first shot at monies. if its insufficient they have no other recourse. if theres left over who gets it first? the put options or the deposit refund? the deposit is guaranteed by BBI so i assume if euroports sale cant cover it, BBI must come up with it one way or another or administrators can use courts to extract 30euro from BBI. what about the put options? do they have a reourse against BBI? how much is the value of put options?

equally as relevent, IF we refund the 30euro and pay the put options out, does that mean BBI have 100% ownership again?

 

[investorpaul]

BB do you know how much Cash is needed to fund the Put option?

I assume it will be a for a higher price than the current market value given it was written up/signed some time ago.