BBI - Babcock & Brown Infrastructure

Jez · 9 October 2009

Julia said:
Just get $35 worth of education via above book and it won't happen again.

That's just about as SPAM as SPAM gets these days! Is there any affiliation here?

Loses are part of the "game". Basically, if you are not on the Corporate Thieves list, then you are providing an interest free loan of your your taxed income to these thieves and it is usually paid back at a lesser amount or not at all!

That lesson is after the fact and provided by me free of charge!

banska bystrica · 9 October 2009

To be honest, I would not want to be there long term. BAM are not in this for anyone else. I would be worried about the non-restrictions on how many assets they can end up owning and remember they will control the Board for sure.
They will own 39.9% of all equity. That is not 50.1% but it's enough to decide what happens, when it happens and to whom it happens if you get my drift.

BEPPA holders have done slightly better than I predicted. Well done. $1 was never going to happen but 30-40c is a very good result considering VA was a near certainty.

BBI holders have been completely shafted, as I predicted. Shares worthless after dilution and 4c capital repayment. Anyone who paid above 4c has done their dough.
This BAM proposal is a poison pill disguised as an aspirin. The Australian has reported that BAM first approached BBI in June. Why wasn't this disclosed? They were also approached by RBS in April. Not disclosed. They also had three firm offers for 100% sale of DBCT. They now say they only wanted to sell 50% yet a short time ago, they announced they had engaged Macquarie Capital to sell up to 100%. They have been stringing everyone along for quite some time, knowing that they were in bed with BAM.
ASIC need to raid every BBI directors' premises and confiscate all paperwork and computer hard drives. I smell a rat and there was also very fishy activity in BEPPA securities recently. From 7c to 20c in quick time and now BEPPA end up with circa 30c-40c depending on future trading prices of new BBI and how many SPARCS convert.

Tysonboss1 · 9 October 2009

So am I right in thinking that under this deal beppa holders will get $0.06 cash and 9 BBI shares / Beppa share held.

beaver1024 · 9 October 2009

Hi Guys,

I have a few questions about this new deal, if someone could provide some insight that would be greatly appreciated.

1) For an ordinary BBI security holder, when will the one off payment of 4c/share occur? The announcement seems to indicate before BEPPA and SPARCS conversion? When exactly will that be?

2) After the payment occurs, what happens to ordinary BBI shares? Do they cease to exist? Do they get converted into the new securities that BBI is rolling out? What is the conversion ratio?

3) As the shares are currently under suspension, when will we be able to trade them again?

vinniesn · 9 October 2009

beaver1024 said:
Hi Guys,

I have a few questions about this new deal, if someone could provide some insight that would be greatly appreciated.

1) For an ordinary BBI security holder, when will the one off payment of 4c/share occur? The announcement seems to indicate before BEPPA and SPARCS conversion? When exactly will that be?

2) After the payment occurs, what happens to ordinary BBI shares? Do they cease to exist? Do they get converted into the new securities that BBI is rolling out? What is the conversion ratio?

3) As the shares are currently under suspension, when will we be able to trade them again?

I can't confirm, but in brief it seems like no more trade, and you will lose all the bbi shares for 4cents per share(no tax for capital return) and you get a chance to participate in SPP for 15k worth at 1.8cents/share. It doesn't matter you hold 1 shares or 10millions shares now, you can buy only 15k worth shares at 1.8cents. This company will be traded in ASX with new code PIS after recapitalisation and possible restructure. There will be restructure in shares, probably at 100:1 or 1000:1 (someone mentioned 10000:1).

skyQuake · 9 October 2009

vinniesn said:
I can't confirm, but in brief it seems like no more trade, and you will lose all the bbi shares for 4cents per share(no tax for capital return) and you get a chance to participate in SPP for 15k worth at 1.8cents/share. It doesn't matter you hold 1 shares or 10millions shares now, you can buy only 15k worth shares at 1.8cents. This company will be traded in ASX with new code PIS after recapitalisation and possible restructure. There will be restructure in shares, probably at 100:1 or 1000:1 (someone mentioned 10000:1).

Yah, you lose all your BBI for 4c each.
Where did you get the 1.8c figure from? I thought that would be determined by bookbuild.

oilman · 9 October 2009

skyQuake said:
Yah, you lose all your BBI for 4c each.
Where did you get the 1.8c figure from? I thought that would be determined by bookbuild.

The prospectus quotes "Offer Price range will be $5.08 to $10.12 per parcel of 15,000 Securities". If this is the case then 0.03-0.07cent/share. So for current BBI holders, 4cent/share payment is essentially what they will get. Their shares will worth 0.03-0.07cent/share after that based on the capital raising.

To be able to get 4cent/share out of whatever you paid for the securities is miserably lucky in comparison to the alternative of going administratorship (which almost certainly of getting nothing and probably wait for long time to know the outcome). I believe BBI shareholders will have no better choice but voting yes to the restructure.

Looking forward, after this redone, I hope the new structure, new board with representatives from Brookfield and institutional investors would change this trust to a better phase. As a small miserable holder of BBI, I believe I should hang on with the SPP and look at it as a long term investment.

vinniesn · 9 October 2009

oilman said:
The prospectus quotes "Offer Price range will be $5.08 to $10.12 per parcel of 15,000 Securities". If this is the case then 0.03-0.07cent/share. So for current BBI holders, 4cent/share payment is essentially what they will get. Their shares will worth 0.03-0.07cent/share after that based on the capital raising.

Are you suggesting current BBI share holders will keep all the shares in new PIG? I hope you are right. If it is true and trade start again on tuesday (as someone suggest on other site), BBI will make little gain (1 to 3 cents up from current SP) and will drop again after ex-div. Otherwise, people will sell at 4 or little less near 4.

First, someone please confirm what will happen to existing BBI shares after 4cents div paid? Will they keep all holding in new company PIG or it is going to be ceased.

skyQuake · 9 October 2009

vinniesn said:
Are you suggesting current BBI share holders will keep all the shares in new PIG? I hope you are right. If it is true and trade start again on tuesday (as someone suggest on other site), BBI will make little gain (1 to 3 cents up from current SP) and will drop again after ex-div. Otherwise, people will sell at 4 or little less near 4.

First, someone please confirm what will happen to existing BBI shares after 4cents div paid? Will they keep all holding in new company PIG or it is going to be ceased.

It will simple cease.

In the offer doc is stated that those who do not participate in the SPP have no further economic interest in BBI.
So you get your 4c and thats it.

Albi · 9 October 2009

Can any one explain to me please please. Things are not coming in my mind.
Can I sell my shares as the trading open as well as take devidend also?
or Can i take only one option?
If I want to take SPP that I am thinking do my shares automatically convert in new?
Or I need to sell first my old BBI shares and then can apply?

I am thinking to take spp with optimistic hope that in future it will cover my loss. I have been holding it for long term.

Please advice me.
Thanks in advance

JackJackJack · 9 October 2009

Ok so good old BBI give me 4c a share and then say goodbye - so nice of them

Can anyone tell me if this is a capital loss that will offset capital gains this financial year?

skyQuake · 9 October 2009

Albi said:
Can any one explain to me please please. Things are not coming in my mind.

Can I sell my shares as the trading open as well as take devidend also?
or Can i take only one option?
There is no selling option, You will get your 4c/share
If I want to take SPP that I am thinking do my shares automatically convert in new?
The SPP is of the new shares. Its effectively an IPO for the new BBI.
Or I need to sell first my old BBI shares and then can apply?

I am thinking to take spp with optimistic hope that in future it will cover my loss. I have been holding it for long term.
Doubtful but one can always hope. But don't let your hope cloud your trading decisions.
Please advice me.

Good luck

drsmith · 9 October 2009

This is what I've worked out from the following statement,

http://www.asx.com.au/asxpdf/20091008/pdf/31l6zg6lq6hvr4.pdf

BBI holders get $0.04 capital return per security and then for all effective purposes the boot. They can however subscribe for new units in the recapitalised entity.

BEPPA holders get about $0.06 in deferred dividends per security plus an economic interest in total representing about 16% of the recapitalised entity.

All in all it strikes me as awfuly complex and will be interesting to see what the recapitalised securities trade at assuming a successful conclusion.

skyQuake said:
Good luck

+1

beaver1024 · 9 October 2009

I'm still a bit confused. It says that EPS and SPARCS can convert to ordinary BBI but if they do they won't get any money from the capital payout. Does this imply that ordinary BBI will still be tradable after capital payout?

If not why would anyone want to convert to ordinary BBI? Additionally it says that EPS (BEPPA) will get direct cash dstributions of 0.042c/share. Where does the rest of the 43c/BEPPA come from? Value of converted shares?? Or do EPS get shares in the new entity?

Tysonboss1 · 9 October 2009

skyQuake said:
Yah, you lose all your BBI for 4c each.
Where did you get the 1.8c figure from? I thought that would be determined by bookbuild.

thats not true,

existing BBI shares will still exist after they have been paid 4c, They will however be diluted so that the total current BBI shares on issue will only represent an ownership in the new entity of about 0.1%,

drsmith · 9 October 2009

beaver1024 said:
I'm still a bit confused. It says that EPS and SPARCS can convert to ordinary BBI but if they do they won't get any money from the capital payout. Does this imply that ordinary BBI will still be tradable after capital payout?

If not why would anyone want to convert to ordinary BBI? Additionally it says that EPS (BEPPA) will get direct cash dstributions of 0.042c/share. Where does the rest of the 43c/BEPPA come from? Value of converted shares?? Or do EPS get shares in the new entity?

BEPPA holders will not get the capital distribution of $0.04 per unit that BBI holders get. They will however get ~$0.06 per unit in deferred dividends. Value over and above this will be the equity value of their 16% stake in the recapitalised company.

The $0.041/$0.042 is only in relation to the price at which BEPPA will convert to BBI. Note however that the $0.04 capital distribution payable to BBI holders will be deducted resulting in a BEPPA conversion price of between $0.001 and $0.002.

skyQuake · 9 October 2009

Tysonboss1 said:
thats not true,

existing BBI shares will still exist after they have been paid 4c, They will however be diluted so that the total current BBI shares on issue will only represent an onwership in the new entity of about 0.1%,

Yeh, but it'll be worth $0.0004 to $0.0008/share.
Existing holders will get about 0~0.1% = $1~2Mil in total.

oilman · 9 October 2009

The prospectus should answer many of your questions here. I guess you should spend some time reading it as it concerns your investment wherether small or large.

From what I could understand, the total existing BBI shares (currently worth $157million) will be worth 1-2 million after the payment of 4cents/share. So if you have 100,000 shares which is currently worth $5,300 as per last closing price, you will get $4,000 in the cheque and those 100,000 shares will be then worth $30-70 base on the price of the SPP. So for many with small amount of shares say 100,000 or less, if you don't take SPP, holding shares worth less than $100 is in fact a cost to the company. For example, they have to send you several mails a year in important events. Many company would want to purge small investor like that.

There is no clear indication what they will do with those small investors who decide not to go for SPP but purging them out would sound like a normal thing many company would do. Wherether you will get a small cheque or just simply forget about it is what I am not sure about. This particular SPP is effectively an IPO for the new trust but giving prefered chance to all existing BBI holders to participate. Brookfield indicated that they will have $87.5 million ready to buy the SPP that existing BBI holders don't want (any short fall). Brookfield and institutional investors are obviously interested in the new chapter of BBI.

Tysonboss1 · 9 October 2009

drsmith said:
The $0.041/$0.042 is only in relation to the price at which BEPPA will convert to BBI. Note however that the $0.04 capital distribution payable to BBI holders will be deducted resulting in a BEPPA conversion price of between $0.001 and $0.002.

So they have said beppa will get approx $0.43 off value, 6 cents in the form of a cash payment.

This means that there is still 37cents of value to be converted.

Are you saying that beppa holders will receive 37cents of shares at $0.002 cents each?

drsmith · 9 October 2009

Tysonboss1 said:
So they have said beppa will get approx $0.43 off value, 6 cents in the form of a cash payment.

This means that there is still 37cents of value to be converted.

Are you saying that beppa holders will receive 37cents of shares at $0.002 cents each?

I'm not sure how they have arrived at $0.43 per BEPPA ($333m in total value).

One simplistic possibility is that they have valued the 84% of the recapitalised entity at $1.5b (equity raising) which would then give a valuation of $286m on the remaining 16% that BEPPA holders get. Add $48m for the deferred dividends and you get $334m in total.

This would imply a a valuation on the recapitalised entity of ~$1.8b but it remains to be seen as to what the market values it at. At that level you would get ~37 cents worth of shares for each BEPPA.

I've calculated the cash payment to be 6.2 cents by multiplying $0.43 by 48/333.

BBI - Babcock & Brown Infrastructure

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