BBI - Babcock & Brown Infrastructure

[tracytop]

think the 30th June report will not be impressive. No doubt BBI sp will be harmed, but Beppa will be affected as well.

I am holding Beppa for long term

 

[fureien]

what june 30 report? i never saw any anouncement indicating a specific date


man ive had a buy order for beppa at 11 cents for weeks and i moved it up to 12 cents on monday no wonder it go processed so easily.

if i knew it was gunna get hit hard like this today i shudve waited ><

 

[Tysonboss1]

It's all just white noise. people have the jitters and are getting cold feet leading up to the possible announcement date.

I am not worried, If you have done your research and ran through the worst case possibilties, then just block out all the white noise over the next 14days

 

[nathanblack]

The fact that AIO decided not to sell there assets, due largely to lack of interest at the desired price, and instead decided on a cap raising must be of some concern.

BBI arent in a position at 8cent a share to raise capital in that way, and if interest wasnt strong in AIO then we must assume(i know,,,never assume or you make an a$$ out of you and me) that BBI will encounter similar difficulties.

that being said, it also means that interested buyers in AIO now must consider BBI assets instead because AIO is no longer on the market.

usually GREAT news has leaks, and end of june is nearing, and BBI said BY end of june, meaning earlier is possible. so the delay and lack of rumors must be of some concern.

the news could still be GOOD or OK, but i understand people wanting to sell before any news and then buy back in after the news is digested. it removes both upside and downside risks.

im still holding and still believe a sale will happen and BEPPA in particular will be re-rated. i think even a dissappointing sale result will see beppa increase but BBI probably need above expectations to really go up.

 

[random]

just to state the obvious that the stock market as a whole has been on a downward roll over the last three days. the pants havn't dropped out of bbi and although beppa has dipped also the volumes of beppa trading are tiny if not infinitesmal in the scheme of things.
So they have slipped..... so what.
If your in, your in, if your not go buy bhp, cba or some other safe haven.
BBI - Be a Bold Individual
and bite the bullet.

Even if you are not super confident with the figures adding up to survival (which i am ) and have said so on many occassions i would take a chance with this one because the return is well worth the punt. As with any share however don't go overboard in your weighting as per your portfolio.

Hold beppa only atm having had both in the past.

 

[cbrendan]

The fact that AIO decided not to sell there assets, due largely to lack of interest at the desired price, and instead decided on a cap raising must be of some concern.

BBI arent in a position at 8cent a share to raise capital in that way, and if interest wasnt strong in AIO then we must assume(i know,,,never assume or you make an a$$ out of you and me) that BBI will encounter similar difficulties.

that being said, it also means that interested buyers in AIO now must consider BBI assets instead because AIO is no longer on the market.

usually GREAT news has leaks, and end of june is nearing, and BBI said BY end of june, meaning earlier is possible. so the delay and lack of rumors must be of some concern.

the news could still be GOOD or OK, but i understand people wanting to sell before any news and then buy back in after the news is digested. it removes both upside and downside risks.

im still holding and still believe a sale will happen and BEPPA in particular will be re-rated. i think even a dissappointing sale result will see beppa increase but BBI probably need above expectations to really go up.

If i recall BBI said 2-3 months just under 2 months ago.

I'd be expecting news between ~ 20th June / 20th July.

Also you have to remember in recent article it was stated that BBI have only started to receive first round offers.

Furthermore the BBI shareprice has largely followed the market in general despite the Euroports uncertainty just around the corner. Sure BEPPAs sunk like a rock, but someone buying/ selling 100k worth of stock can shift BEPPA 20% either way so BEPPAs recent movement is largely irrelevant. Personally i beleive that BBI would be SERIOUSLY tanking right now if someone new the BBI euroports was bad and DBCT offers are not up to a reasonable standard.

So the fact that its stationary leads me to beleive that some know news re: dbct but are waiting for the perfect entry point after bad news for euro ports or something similar.

Hopefully some of my ramblings makes sense

 

[fuzzie]

Also let's not forget we are in the last 2 weeks running up to the EOFY. There has to be a bit of tax time selling and trader account balancing going on.

In any event, when I checked BBI early yesterday there were a couple of buy orders in there for parcels over 1 million shares, so at least one entity with serious money is seeing current prices as a buy opportunity. There is currently one sitting on the top of the buy queue for ~ 1/2 mil

 

[hardyakka]

Looks as things are not going well for PD Ports. It looks as though this will be the first impairment to affect BBI holders, so a few hundred million may be knocked off of the NTA. From my previous post I calculated on a scrap of paper that NTA plus $1B of inherent value after allowing for $0.5B of impairments would be $3.4B. As a BEPPA only holder I am not overly concerned about the below noted.

http://www.telegraph.co.uk/finance/...osure-of-steel-plant-hurts-PD-Ports-sale.html
Cheers

 

[nathanblack]

Looks as things are not going well for PD Ports. It looks as though this will be the first impairment to affect BBI holders, so a few hundred million may be knocked off of the NTA. From my previous post I calculated on a scrap of paper that NTA plus $1B of inherent value after allowing for $0.5B of impairments would be $3.4B. As a BEPPA only holder I am not overly concerned about the below noted.

http://www.telegraph.co.uk/finance/...osure-of-steel-plant-hurts-PD-Ports-sale.html
Cheers

As much as we often fret about the complex business stucture of BBI, its times like this that we can be greatful. After all PD Ports can fail and it only brings down that entity and not the mothership BBI.

There was nothing terribly new in that article, its still not 100% but certainly looking more and more likely that corus will pull out. thats about 20% fall in revenue. market had already been informed about the possibility so i doubt there will be an official update at this stage. my guess is its more or less factored into the current BBI price.

Probably of greater interest in the article is that BBI are pressing on with a sale. After dbct goes, corporate debt deminishes and interest payments on PD Ports can be made. I'd probably wait to get closure on corus and try drum up business from elsewhere, wait a year for better economic outlook, then sell if finances require.

they valuations mentioned in the article arent great, but they arent official numbers from BBI, but they seem ballpark figures if corus leaves a 20% hole in revenues.

overall, nothing new there. not great news, will probably have a slight negative impact on BBI once its official and depending on the exact sale price. Still fairly neutral for BEPPA, which is more big picture kinda stuff.

if the overall market trends lower (EOFY/ retrace) and PD Ports struggles, particularly if it went into admin, the market would over react and send BBI lower. combine that with possible issues at euroports which has more likely negative than positive outcome, you could get a snowball effect.

then if dbct is less than hoped for, the bbi sp would really get smashed. But i still see beppa rising post dbct.

thanks for that link

 

[persistentone]

Was there an official announcement of DBCT being for sale, or of a pending sale? Can someone give me the timeframe of that announcement so I can go look it up?

 

[nathanblack]

Was there an official announcement of DBCT being for sale, or of a pending sale? Can someone give me the timeframe of that announcement so I can go look it up?

back in about april from memory. the announcement was in regard to Maquarie being appointed to oversee the bidding/sale process. An announcement regarding the outcome is due late june/early july. no guidence has been given regarding price range. only info is that offers have been made for the 100% of dbct and lesser stakes.

cheers

 

[hardyakka]

As much as we often fret about the complex business stucture of BBI, its times like this that we can be greatful. After all PD Ports can fail and it only brings down that entity and not the mothership BBI.

There was nothing terribly new in that article, its still not 100% but certainly looking more and more likely that corus will pull out. thats about 20% fall in revenue. market had already been informed about the possibility so i doubt there will be an official update at this stage. my guess is its more or less factored into the current BBI price.

Probably of greater interest in the article is that BBI are pressing on with a sale. After dbct goes, corporate debt deminishes and interest payments on PD Ports can be made. I'd probably wait to get closure on corus and try drum up business from elsewhere, wait a year for better economic outlook, then sell if finances require.

they valuations mentioned in the article arent great, but they arent official numbers from BBI, but they seem ballpark figures if corus leaves a 20% hole in revenues.

overall, nothing new there. not great news, will probably have a slight negative impact on BBI once its official and depending on the exact sale price. Still fairly neutral for BEPPA, which is more big picture kinda stuff.

if the overall market trends lower (EOFY/ retrace) and PD Ports struggles, particularly if it went into admin, the market would over react and send BBI lower. combine that with possible issues at euroports which has more likely negative than positive outcome, you could get a snowball effect.

then if dbct is less than hoped for, the bbi sp would really get smashed. But i still see beppa rising post dbct.

thanks for that link

Nathan,

Fair comment and I basically agree with your comments. Bottom line is that the impact is not significant in the overall scheme of things and asset level debt is quarantined.

basically in a worst possible case situation if BBI tanks short term then irrationally BEPPA is likely to follow suit. That will be a very short term buying opportunity. It it tanked to 5 cents I would be first in line for a million or two.

Cheers

 

[Mitsimonsta]

If it tanked to 5 cents I would be first in line for a million or two.

Get yourself a very large and nasty stick, you will need it to protect your position in the line from BB trying to buy....

 

[persistentone]

I am a foreign investor, and I have never purchased an Australian income security before. Can someone tell me does the 12 cent quote mean this trades like a penny stock, or is the 12 cents on the dollar just the quote but the actual purchase if for a block of securities (similar to what they do in the U.S. with bond purchases or option purchases)?

 

[bellenuit]

I am a foreign investor, and I have never purchased an Australian income security before. Can someone tell me does the 12 cent quote mean this trades like a penny stock, or is the 12 cents on the dollar just the quote but the actual purchase if for a block of securities (similar to what they do in the U.S. with bond purchases or option purchases)?

I presume you mean BEPPA?

For all practical purposes, when it comes to trading, it is just like any other stock. You can purchase as few or as many as you like, so long as you meet the normal minimum order value set by your broker. There are no fixed block amounts that you must buy or sell in.

 

[bellenuit]

I am a foreign investor, and I have never purchased an Australian income security before. Can someone tell me does the 12 cent quote mean this trades like a penny stock, or is the 12 cents on the dollar just the quote but the actual purchase if for a block of securities (similar to what they do in the U.S. with bond purchases or option purchases)?

Do you mind if I ask why you have chosen BBI/BEPPA as the first Aussie security to buy? Is it somehow related to your knowledge of their US asset NGPL?

 

[roland]

Do you mind if I ask why you have chosen BBI/BEPPA as the first Aussie security to buy? Is it somehow related to your knowledge of their US asset NGPL?

Yes, bellenuit, I was sort of curious about that as well. I have to admit it probably wouldn't be my first choice of a 1st Aussie investment.

 

[hardyakka]

PD Ports

I had a chat with Helen at Investor Relations today regarding the numbers quoted in the press of BBI reducing the asking price for PD Ports from GBP 450M to GBP300M.
In summary Helen said that no financial data had been provided by BBI. This data had been originated and perpetuated by the UK press, despite BBI pointing out that they had not provided that information. (They cannot affirm or deny).Helen also noted that the supposed reduction in price of GPB150M, were it true, would be a material amount and require disclosure under the ASX Listing Rules. Helen also said that, as notified in April, negotiations with interested parties are continuing.
My view is that a price reduction of that amount would have been disclosed immediately by BBI under the listing rules so IMO someone in the UK press is telling porkies. Since when did the truth ever sell papers. Its the screaming headline, especially if the Aussies are getting hammered, and girl on page 3.
Cheers

 

[mark_au]

Re: PD Ports

I had a chat with Helen at Investor Relations today regarding the numbers quoted in the press of BBI reducing the asking price for PD Ports from GBP 450M to GBP300M.
In summary Helen said that no financial data had been provided by BBI. This data had been originated and perpetuated by the UK press, despite BBI pointing out that they had not provided that information. (They cannot affirm or deny).Helen also noted that the supposed reduction in price of GPB150M, were it true, would be a material amount and require disclosure under the ASX Listing Rules. Helen also said that, as notified in April, negotiations with interested parties are continuing.
My view is that a price reduction of that amount would have been disclosed immediately by BBI under the listing rules so IMO someone in the UK press is telling porkies. Since when did the truth ever sell papers. Its the screaming headline, especially if the Aussies are getting hammered, and girl on page 3.
Cheers

Thanks for finding out that info Hard Yakka, BBI sure has taken a hammering over the last couple of days.. Hanging out for ports sale information.......

 

[persistentone]

Do you mind if I ask why you have chosen BBI/BEPPA as the first Aussie security to buy? Is it somehow related to your knowledge of their US asset NGPL?

First, I have not purchased BBI EPS yet; but I am very seriously considering it. Second, my target buy price would be around six cents. I wouldn't touch BBI if you paid me. But the income securities are interesting only because they might get a good recovery in receivership.

I'm a subscriber to the Intelligent Investor, and they had a writeup on this one where they recommend it as a *speculative* interest security. Their article had a very nice table showing all of the BBI debts, and all of their assets.

The article argues that the sale of Powerco and cash on hand will pay all debts due through 2010, which leaves roughly $1B due in December 2011.

So what I am left to ask is can a sale of some combination of Westnet Rail, NGPL, DBCT, or PD Ports payoff that $1B? Given they have two whole years to find buyers, I am thinking the odds of success there are high.

There are two cases as I currently understand it:

1) BBI goes into receivership in which case I guess we get a forced sale on all assets. I think we cover the $1B in debt and probably see about a 20% to 30% recovery on the BBI EPS in receivership. That might be a 20 cent recovery on a six cent investment. I could live with that. Is there something about how they do receivership in Australia I should know about that might make this unlikely?

2) BBI does partial or whole asset sales on any of the above and manages to continue as a viable entity. In that case I hope something close to half the original distribution might come back, and I get back the entire investment in under two years. Anything beyond that is just creme.

What worries me most here isn't the bad financial situation, but the fact that BBI appears to be a bad actor. They gouge their shareholders with all kinds of nasty fees. They seem to be working for themselves, not for the shareholders.

So it's very high risk and very high reward. I think you only buy this one if you get a chance to bottom feed.

I understand that BBI had some major debt obligation due in June 2009? What is the status of that?

P.S., what are your favorite Australian income securities?