BBI - Babcock & Brown Infrastructure

[ricee007]

im just happy because the balance sheet has improves with every conversion, bring on more conversions i say. NTA per share will fall a little again, thats why i think the gap between BBI and BEPPA will not close now

Well, yea, as a 100% BEPPA holder I want all SPARCS to convert. Now. Immediatly. I don't care at what price (higher would be nice, but I'm not fussy).

Having said that... BBI has around $12Bn in debt.
This 'extra conversion' was $1.3M.

$1,300,000 less debt
$12,000,000,000 total debt.

Kinda puts it into perspective.

 

[nomore4s]

Totally.

10M more BBI on issue. Will totally dilute the 2.6Bn BBI shares on issue.

(Though, in the next couple of days, it MIGHT affect the SP as most of these 10M people consider selling (to put it into comparison, 55M BBI sold yesterday), but not really total dilution)

lol, there are already 2.6b shares on issue and you are worried over a new issue of 10mil. That is only an increase of less then 0.5%.

My prediction is it will have no effect whatsoever on the SP.

 

[nathanblack]

lol, there are already 2.6b shares on issue and you are worried over a new issue of 10mil. That is only an increase of less then 0.5%.

My prediction is it will have no effect whatsoever on the SP.

but in context, these 10mil are in addition to the 205mil odd that were initially said to be converted on friday. i still think all the conversions will add downward pressure as we head into a new tax year.

 

[ricee007]

lol, there are already 2.6b shares on issue and you are worried over a new issue of 10mil. That is only an increase of less then 0.5%.

My prediction is it will have no effect whatsoever on the SP.

10M new shares issued for people who bought into SPARCS at about 30cents........

Have the chance to sell immediatly for 90cents.

Means, that I would expect, 7.5M extra BBI for sale ASAP.

7.5M extra sellers *WOULD* probably have an actual, immediate, effect on the share price.

Long term, dilution is negligble and shouldn't affect anything. Short term. Extra pressure to sell at any price.... 10M is a lot of shares (around 20% of one day trading)...

SPI pretty much even, BBI down 4%...

EDIT:-Finally more BEPPA buyers than sellers.
Still > twice as many sellers than buyers for BBI.

I'm glad i'm 100% BEPPA.

 

[fureien]

10M new shares issued for people who bought into SPARCS at about 30cents........

Have the chance to sell immediatly for 90cents.

Means, that I would expect, 7.5M extra BBI for sale ASAP.

7.5M extra sellers *WOULD* probably have an actual, immediate, effect on the share price.

Long term, dilution is negligble and shouldn't affect anything. Short term. Extra pressure to sell at any price.... 10M is a lot of shares (around 20% of one day trading)...

SPI pretty much even, BBI down 4%...

EDIT:-Finally more BEPPA buyers than sellers.
Still > twice as many sellers than buyers for BBI.

I'm glad i'm 100% BEPPA.

i think that sums it up quite well (the 20% of daily volume bit)
and i think its starting to take effect already. 7.3 cents, one month low already. so glad i sold out early.

the question is when to buy back in again. 5 cents doesnt seem that improbable now though there is heavy support at 7 cents.

and with beppa there are more buyers than sellers, but its not very significant. and i think beppa is still being affected by BBI. which is very annoying, pretty much lost all of yesterdays gains

 

[ricee007]

the question is when to buy back in again. 5 cents doesnt seem that improbable now though there is heavy support at 7 cents.

and with beppa there are more buyers than sellers, but its not very significant. and i think beppa is still being affected by BBI. which is very annoying, pretty much lost all of yesterdays gains

That's one question...

Another would be 'should I just buy BEPPA now and be happy that I expect it to be $1.20 in June 2012'.....

Hmm...

 

[fureien]

seeing as how the world is supposed to end in 2012
http://en.wikipedia.org/wiki/2012
short term for me

 

[nathanblack]

That's one question...

Another would be 'should I just buy BEPPA now and be happy that I expect it to be $1.20 in June 2012'.....

Hmm...

And another...
How low will BEPPA go in sympathy with BBI? i think with the announcement end june, you need to have your position locked in by mid june or you may miss the boat. Perhaps wait a week for SPARCS selloff to stabilize then buy in.

 

[nathanblack]

seeing as how the world is supposed to end in 2012
http://en.wikipedia.org/wiki/2012
short term for me

i noticed no mention of BEPPA redemption on the calender of events for 2012. Look on the bright side, the scheduled end is December 21, BEPPA payout in june, so we can enjoy the proceeds for a few months before the end. so still long term for mine.

 

[fureien]

And another...
How low will BEPPA go in sympathy with BBI? i think with the announcement end june, you need to have your position locked in by mid june or you may miss the boat. Perhaps wait a week for SPARCS selloff to stabilize then buy in.

locked in beppa or bbi?

doesnt everything (well a major part) depend on how things turn

i noticed no mention of BEPPA redemption on the calender of events for 2012. Look on the bright side, the scheduled end is December 21, BEPPA payout in june, so we can enjoy the proceeds for a few months before the end. so still long term for mine.

lol web.bot (google it) predicted massive stock crash in the periods before 2012 lol. but i digress.

long term still depends on whether bbi can manage its debt in the short term.

 

[nathanblack]

locked in beppa or bbi?

doesnt everything (well a major part) depend on how things turn

yes, it depends on how things turn, but every indication is that they have firm offer above book value for 100% control of DBCT.

if your a believer and think that a sale announcement or update will be forthcoming by end june, and you believe from your own research and facts available at this time that the numbers add up, i think its safe to say a re-rating will occur at this time. so you must hold a position before this time.

me personally, im beppa only at this time, but i think both will go upwards after sale of dbct and be rewarding. i just think beppa has less risk(long and short term) and dont think bbi will be above $1 in 2012 if more dilution occurs.

if your a non believer and think the sale will not be in favour of BBI, then obviously sit out until the announcement and buy after downward rerating. but if ur not a believer that bbi can sell asstes on good terms then i suspect u dont believe in bbi survival.

your obviously a believer in dbct, so i guess we just need to wait and see if a re-rating occur in late june/early july, and either hold or accumulate until them.

but i honestly believe we will wake up one morning and read of an imminent sale of dbct and SP will double. i want to hold before that happens.

 

[fureien]

but i honestly believe we will wake up one morning and read of an imminent sale of dbct and SP will double. i want to hold before that happens.

dont we all hate that

ill be keeping an eye out on bbi over the next few weeks for buying opportunities. i dont tink theres a need to wait till june to buy in again.

 

[RodH]

Westnet rail bad news;
http://fw.farmonline.com.au/news/st...work-future-hangs-in-the-balance/1518312.aspx

 

[nomore4s]

but i honestly believe we will wake up one morning and read of an imminent sale of dbct and SP will double. i want to hold before that happens.

Or you could wake up one morning and BBI has been put into receivership due to it's high debt levels. Remember there are real downside risks to this stock atm.

The speed of its fall form 19c has been pretty quick, needs to find some support soon or we could see it testing its lows,

 

[nathanblack]

Or you could wake up one morning and BBI has been put into receivership due to it's high debt levels. Remember there are real downside risks to this stock atm.

The speed of its fall form 19c has been pretty quick, needs to find some support soon or we could see it testing its lows,

Certainly agree on that point. Many investors manage risk by not investing prior to major announcements and wait for a level of certainty before investing. Thats a safe and smart approach. Otherwise your really just relying on luck.

If a successful sale cant be achieved in a satisfactory timeframe then receivership is a real possibility.

The speed of the fall from 19c was quick, but so too was the rise. And for mine, the volumes around 19c were so low, infact the only sales at that price were in the closing auction of that day. A more true reflection is the weighted average which is much lower, so the fall is not as significant. and the gains over 2 or 3months still quite nice.

 

[banska bystrica]

Westnet rail bad news;
http://fw.farmonline.com.au/news/st...work-future-hangs-in-the-balance/1518312.aspx

This could have a very negative impact on WestNet Rail's revenues going forward. If major customers are using road instead of rail, the business is in trouble.
I have tried to contact BBI about this but they are in meetings. This news will have to be announced to the market as it is price sensitive, just like PD Ports.
The "news" is in the public domain so people can act on it legally. I'm holding BEPPA. I don't hold any BBI.

 

[hardyakka]

This could have a very negative impact on WestNet Rail's revenues going forward. If major customers are using road instead of rail, the business is in trouble.
I have tried to contact BBI about this but they are in meetings. This news will have to be announced to the market as it is price sensitive, just like PD Ports.
The "news" is in the public domain so people can act on it legally. I'm holding BEPPA. I don't hold any BBI.

BB,
A few points that should be noted here that were made across the road are:
a) grain revenue contributes about 15% of WR revenue, ie about $15M.
b) in an article posted there was commentary that WR considered many grain routes uneconomic and may look to closing them down, this implies reducing grain routes may be profit accretive. The link courtesy of a poster across the road is:
http://www.abc.net.au/rural/wa/content/2006/s2476557.htm

I would tend to think that it is more a case of WR trying to position themselves for a handout as part of the nation building exercise. It is in BBI's interest that they plead doom and gloom to extract as much as possible from Canberra.
My final thoughts are that if the WR matter was material BBI have an immediate notification requirement under ASX LR 3.1, so the fact nothing was announced tends to imply it is not material.
Cheers

 

[fuzzie]

I'm too cheap to pay for the full report but this abstract from Standard and Poor's rates DBCT at BBB+. That places DBCT in the middle medium grade, well above questionable risk status.

Waiting for the play offs.....

http://www.alacrastore.com/storecontent/spcred/720906

 

[Jez]

That places DBCT in the middle medium grade, well above questionable risk status.

We know how good DBCT is, but when it is no longer owned by BBI, is BBI still worth the money from the rest of it's income producing assets?

 

[ricee007]

We know how good DBCT is, but when it is no longer owned by BBI, is BBI still worth the money from the rest of it's income producing assets?

BBI has around $15Bn in assets.
Selling $1.9Bn (Book Value) won't ruin the company.

Next FY forecasted EBITA for DBCT is $224M... (less this year).

If DBCT sells for $2.8Bn (my best guess...)...$2.8Bn of debt can be wiped out.

$2.8Bn * 8% interest payments = $224M.

So, DBCT can "save" a similar amount of interest as they lose in EBITA... (A post on HC used *actual* interest numbers, and depending who you asked, it was around about -$10M to +$50M).

DBCT is (IMHO) BBI's second best asset....losing it will hit revenues... but if we can save the same amount in interest (at least short-term), than that is just dandy.

When dividends return, I think it's a safe bet to assume they won't return immediately to the same levels. What, with asset sales and SPARCS (/BEPPA ?) dilution...

But, BBI can still make a good profit without DBCT.

EDIT:-DBCT EBITA of $224M (next year. forecasted)...
$1.7Bn in DBCT debt (IIRC)...
@ 8% thats $136M
Thats $88M EBTA
Tax rate of 30%.
Leaves EBA of $61.6M......

2.6Bn shareholders...
About $0.024 less per year per shareholder.