BBI - Babcock & Brown Infrastructure
- Thread starter roland
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I just hope BBI holds above 10 to 10.5c, it seems to have support there (although we have said that about other levels as well).
However viewing the depth now there is 5m worth of units wanting to be bought at 11cents so it will take a while to get through that
EDIT: I know this doesnt mean much but BBI is the second more bought stock through commsec at the moment.
However viewing the depth now there is 5m worth of units wanting to be bought at 11cents so it will take a while to get through that
EDIT: I know this doesnt mean much but BBI is the second more bought stock through commsec at the moment.
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I was hoping/thinking the price would hold up today at around 10.5c and 11c im less optimistic now there is twice as many sellers to buyers at the moment
and yes a bucket load went through at 10:05:21 I havnt done the sums but it is approx 5m
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I posted over the road on opening that I sold 1.5M at 12c and the balance of my BBI holding at 11.5c.
I am bullish long term but much prefer the BEPPA entry. I am looking to buy more BEPPA next week.
I am bullish long term but much prefer the BEPPA entry. I am looking to buy more BEPPA next week.
BBI announcment seems positive for BBI (Only 25M SPARCS out of 145M)...
ORG/BBP's announcment seems positive for BBP.
RIO's announcment seems to indicate good news for RIO/Chinalco Deal, which *MIGHT* increase DBCT sale price.
Yet, BEPPA and BBI both fall, whilst the ASX200 rises.
Hmmm...
ORG/BBP's announcment seems positive for BBP.
RIO's announcment seems to indicate good news for RIO/Chinalco Deal, which *MIGHT* increase DBCT sale price.
Yet, BEPPA and BBI both fall, whilst the ASX200 rises.
Hmmm...
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25,803,504 SPARCS get converted at approx 10c. This will add 260M shares to the BBI register. Most of those will be sold on market (given that SPARCS converters want to cash out via the conversion).
The 2nd resolution passing is potentially disastrous for BBI holders. That's why I exited my remaining BBI shares this morning.
The remaining 120,400,605 SPARCS can be converted into BBI securities before 28/09/2009. Now think about that dilution if the BBI price is still less than 15c.
This vote in NZ this morning was a very negative result for BBI.
Looking to buy more BEPPA next week.
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Crikey - when BB moves, we take notice. Me, I just sold 250k BBI, average buy price was 5.5c so it wasn't all bad. What a wild ride it's been over the last couple of months
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Just to clarify that statement.
The vote was a big negative for BBI holders, not BBI the company. It was actually beneficial for the company because debt got converted to equity.
The BBI holders got diluted but the company is better off to the tune of $25.8M. That's $25.8M they no longer owe.
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With BB having as many shares as he does, you'd be crazy not to sit up and take notice.
I am just more upset that I didn't sell out of BEPPA at 18c and then buy back in either today or early next week.
I think we may just test our 10c support level in BEPPA.
I am just more upset that I didn't sell out of BEPPA at 18c and then buy back in either today or early next week.
I think we may just test our 10c support level in BEPPA.
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I said I am looking to buy BEPPA "next week". I don't know about 5c as you say but certainly anything under 10c would be great. This news today is not bad for the company. As I explained, debt has been transferred to equity by this surprise vote (surprise to me anyway). The losers are BBI equity holders. BEPPA will fall in sympathy but it's actually positive for BEPPA. Less debt stands in front of it in the case of liquidation.
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Meaning that BEPPA holders have $25M more to be distributed to them than before IF a liquidation takes place.
The way things are going with BBI and their problems with selling assets looks like Banks will pull the pin on this one too. Then Beppa and BBI will both will be wortless as the Banks will take all the cream.
If they amend BBP terms good news for BBI, incase they pull the pin on BBP BBI is next in line.
If they amend BBP terms good news for BBI, incase they pull the pin on BBP BBI is next in line.
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I doubt that BBP will not have debts refinanced, they have had some good news of late, and there is a good chance that ORG would want to buy at least some of the assets. ORG are cashed up and ready to roll.
BBI are in a similar situation. They have had a reset of terms with the DBP which was very good news (and a relief to most of us holding stock).
Today's news is good for BBI as it is a direct $50M improvement in the balance sheet. Not only is $25M removed from the debt side, it's also added to the equity side. This will be noted by the banks.
BBI are in a similar situation. They have had a reset of terms with the DBP which was very good news (and a relief to most of us holding stock).
Today's news is good for BBI as it is a direct $50M improvement in the balance sheet. Not only is $25M removed from the debt side, it's also added to the equity side. This will be noted by the banks.
More importantly...
NetTotalAssets are seemingly above $1. I did a calculation recently, using disastrous figures, NTA was still 16c per share (slightly less now that there are another 200,000,000 or so BBI shares).
If BBI goes to the wall (unlikely) BEPPA and BBI holders should still manage to get a good return, IMHO!
But, yea, in September, 125,000,000 SPARCS could convert to equity. At 10c, thats 1.25B more BBI. About 1.9B BBI are currently issued (then add 0.2B for todays notice).... so, an additional 1.25B will have a *VERY VERY VERY significant* effect on BBI shareprice.
If in September, DBCT has been sold and BBI is 40c, only 0.3Billion BBI could be created, nowhere near as significant dilution.
However, of course, none of that is fundamentally negative for BEPPA holders. It would just mean $125M less debt. $125M more equity. And ranking $125M higher in the case of a liquidation/administration.
As to my opinion? I've been saying all a long that I'm happy with the 1200% return I expect from BEPPA, and don't care if BBI reaches higher than $1 (and so, can't see why people are long term holding BBI over BEPPA).
I think today reaffirms my position.
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I am a very small player in the scheme of things. There are 778M BEPPA on issue. The instos will always determine short term price movements.
I would be happy buying BEPPA as cheap as possible. 5c? Who knows? It wasn't that long ago we were loading up at 5c.
Today's vote result was positive for BEPPA holders but the BEPPA price is going down in sympathy with BBI.
I would be happy buying BEPPA as cheap as possible. 5c? Who knows? It wasn't that long ago we were loading up at 5c.
Today's vote result was positive for BEPPA holders but the BEPPA price is going down in sympathy with BBI.
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I'm not sure that I agree with that statement. Debt and Equity are on the same side of the balance sheet.
A=L+E (Assets = Liabilities + Equity)
A has stayed the same, but $25M has been moved from L to E).
I don't think banks care much about E, but they are interested in A-L, which has increased by $25M. Seeing it as a $50M improvement is double dipping IMO.
(I may be wrong, but that is how I remember it from some accounting units I did many moons ago).
It certainly is positive for BEPPA and negative for BBI, but I think BEPPA will still follow BBI in sympathy due to misconceptions of what BEPPA is.
The conversion of SPARCS to BBI, no matter how many are converted will depress the BBI price because it will create an overhang of stock in the market and dilute BBI.
As you have said this is a positive for BEPPA, but unfortunately BEPPA religiously follows BBI and of course will trend downward. Sooner or later the market will wake up to the fact that the conversion of SPARCS to BBI is a plus for BEPPA and price it accordingly, but then is this market rational?
I have only ever held BEPPA for several reasons including no matter how many additional BBI are issued and the dilution existing holders suffer the NTA "cushion" of $2.4B for BEPPA remains and will actually increase by the value of SPARCS converted. Again risk/reward.
So BBI has gone down a few cents because of the SPARCS vote. What do you think will be the impact of the positive news of the DBCT sale?
These developments have IMO affirmed the more risk averse strategy of only holding BEPPA, but there is still a level of risk in those.
A while ago BB commented that on the upward trend he expected the gap between BBI and BEPPA to widen significantly in the 20 to 50 cent range, an astute observation should the securities reach these levels.
Cheers
The banks hold senior debt which ranks above SPARCS, BEPPA and equity, so reallocations between those classes at the end of the day is totally irrelevant for them, except it affects gearing.
However it is very important for the BEPPA/SPARCS and BBI holders in a realisation scenario..
BBi do not get a cent until SPARCS and BEPPA debt and accrued interest have been paid out. So if BBI NTA is $2.5B, then this is the amount by which the realisable value of the assets must drop before BEPPA and SPARCS are affected.
Cheers
However it is very important for the BEPPA/SPARCS and BBI holders in a realisation scenario..
BBi do not get a cent until SPARCS and BEPPA debt and accrued interest have been paid out. So if BBI NTA is $2.5B, then this is the amount by which the realisable value of the assets must drop before BEPPA and SPARCS are affected.
Cheers
