BBI - Babcock & Brown Infrastructure

Gunlom · 2 July 2009

How a trained professional business journalist can miss read 2 different announcements then merge them into one mixed up review is staggering. And they get paid to do that, and punters pay for these so called expert reviews.....

one of the reasons I never believe anything in the media. Quality journalism is very far and few between.

just my 2 cent rave...

Mitsimonsta · 3 July 2009

Anyone know the amount of the September quarter distribution? Apparently it hit at 5.07pm but I cannot see it on the ASX site, nor the BBI site.

Mitsimonsta · 3 July 2009

Sept 09 Distribution: $0.0109 per unit of BEPPA.

At my current 8.4c average buy price, and an annual return of 4.36c (1.09*4) then that is a 51.8% annual return on investment.

Might be time to back the truck up again.....

drsmith · 5 July 2009

For the uninitiated the annual return on BEPPA is 0% while the distributions remain unpaid.

select · 5 July 2009

I wonder if there are many BBI holders on ASF who have been sucked into BBI by BB.

Has BB left the scene of an accident?

nathanblack · 5 July 2009

select said:
I wonder if there are many BBI holders on ASF who have been sucked into BBI by BB.

Has BB left the scene of an accident?

BB is entitled to his opinions regarding bbi/beppa and ASF members surely arent so stupid as to buy with performing research.

Besides BBI isnt dead yet. is it?

as far as i know AFR during the week mention the prospect of capital raising, and the Herald Sun today had an analyst "sell" recommendation based on possible dilution(from raising) and the general issues in BBIs way(beppa dilution, asset sales, debt).

i dont think people are going to get rich on this one, it will either be a slow death or an even slower recovery, but to blame BB is plain wrong and belittles the intelligence of forum members.

btw i think BB is on an overseas vacation.

hardyakka · 5 July 2009

select said:
I wonder if there are many BBI holders on ASF who have been sucked into BBI by BB.

Has BB left the scene of an accident?

I think its naive to think that people acquired an exposure to BBI/BEPPA solely because of BB's comments. An individual alone is accountable for his own actions, no one else.

Cheers

hardyakka · 5 July 2009

drsmith said:
For the uninitiated the annual return on BEPPA is 0% while the distributions remain unpaid.

There is a return on BBI and BEPPA.

The definition of "total return" is:

The return on an investment, including income from dividends and interest, as well as appreciation or depreciation in the price of the security, over a given time period, usually a year.

Total return consists of the return from income and capital. So despite the fact that the return from distributions may be nil, there is a return based upon the movement in the BBI price relative to your cost.

Cheers

banska bystrica · 5 July 2009

select said:
I wonder if there are many BBI holders on ASF who have been sucked into BBI by BB.

Has BB left the scene of an accident?

As you would know select or mccrae or fluffynymph or whatever name you go by, I am indeed posting from a little town called Zilina in Slovakia. Going to Prague by train tomorrow. You doubted me last time so go to the other site and check out the IP addresses.

Now, if any member did actually did follow me they would have been loading up in November at around 3c and they would have sold immediately the Corus news hit at circa 17c, maybe a tad higher. Now that is a mighty fine return in seven months by anyones standards. Even you would be happy with circa 500 percent.

BBI is not dead. Far from it, however, the equity holders are at extreme risk of being diluted to next to nothing. BEPPA holders sit tight, once DBCT is sold, you are home for the tea money.

shallumstuart · 5 July 2009

DJ Terra Firma To Bid For Babcock & Brown's PD Ports - Report
05/07/2009 09:11PM AEST

LONDON (Dow Jones)--Private equity firm Terra Firma will this week bid for Babcock & Brown Infrastructure's (BBI.AU) PD Ports unit, The Sunday Times says without citing sources.

Terra Firma will join HgCapital, CVC Capital, Carlyle and Star Capital in bidding for the group, the newspaper says. If bids fail to surpass the firm's GBP315 million debt, Babcock could postpone the auction, it added.

Terra Firma wasn't immediately unavailable for comment.

Viva_Las_Vegas · 5 July 2009

Pity to see a lot of the positive sentiment gone from this bbi thread.

Last post shows some promising news.

Lets see a show of hands how many members actually think BBI has a LT prospect of survival...hmmmm

"PUTTIN MY HAND UP"

Stakes · 5 July 2009

For the sale of the DBCT port, are they wanting to sell 100% or nothing. Or is it a matter of selling as much as peoplewant maybe 50% or less but to ensure that at least some debt is paid back? What type of reaction would we be looking at if the port sells completely for 2.5 billion?

Cheers for your time,

Stakes

ricee007 · 5 July 2009

Stakes said:
For the sale of the DBCT port, are they wanting to sell 100% or nothing. Or is it a matter of selling as much as peoplewant maybe 50% or less but to ensure that at least some debt is paid back? What type of reaction would we be looking at if the port sells completely for 2.5 billion?

Cheers for your time,

Stakes

They originally stated 49%...
Later said 100% was possible with the right bidder...
Either is still possible.

As a BEPPA holder, I want BBI to sell 100% at a good price as, IMHO, that will ensure BBI's survival. However, I do understand that if a good price can't be obtained, a 49% sale may be best.

It is INSANELY unlikely that a 50% sale would occur.
a 51% sale is VERY unlikely...
a 49% sale is very possible...
a 100% sale is most likely...
IMHO.

I BELIEVE the market would prefer a 100% sale, (would show that BBI believes that they got a good offer [and, therefore, it would be likely that BBI DID get a good offer])...

I am VERY sure BEPPA holders would prefer a 100% sale.

I don't think there is anyone in the world who doesn't believe in a SIGNIFICANT increase in SP if (assuming no other news) DBCT sells for $2.5Bn. This would be MASSIVELY positive news for BBI, and even more so for BEPPA.

I believe DBCT will sell for AT LEAST $2.4Bn (likely, more); if BBI chooses a 100% sale. (FTR, 2.6-3.0 is my best guess).

mikes · 6 July 2009

bb , holding his current beppa investment at the odds (net cost 2 cents) of est 60 to 1 is currently a declared top up buyer of beppa at the odds of est. 14 or 15 to 1, but he will not currently downsell his bets at odds as low as 11 or 12 to 1 - he is a holder of beppa at 11 or 12 to 1. and i assume is totally ungeared. if any one is nervous / pannicky they have the opportunity to get out of beppa at odds of 12 to 1 now. The original investors (punters) in beppa at odds of 1 to 1 have done their dough.

my take is that it is currently a bet on the price regulator ticking off on usage prices of monopoly infrastructure at usage prices sufficient to suitably cover the prices paid ( after allowing for est overpayment and overcharging of fees etc of $700 million) by the bbi directors for the investments (punts) and ticking off on bbi cost of capital and borrowings as appropriate. and the directors not unduly ripping off the beppa investors with unwarranted fees and charges from bbi to themselves, contracted managers, associates and advisors.

also a bet that the finance providers will not panic, and will at least wait for the est $100 million sparcs conversion to bbi in est 4 months to increase their security.

in my opinion, with subordinated debt (beppa) currently priced for full repayment at odds of 12 to 1), the bbi investors in bbi are in effect option holders in bbi and have done all their dough.

and yet the bbi sharehoders have all the votes and beppa holders have nil votes.

hold beppa only

persistentone · 6 July 2009

nathanblack said:
BB is entitled to his opinions regarding bbi/beppa and ASF members surely arent so stupid as to buy with performing research.

Besides BBI isnt dead yet. is it?

as far as i know AFR during the week mention the prospect of capital raising, and the Herald Sun today had an analyst "sell" recommendation based on possible dilution(from raising) and the general issues in BBIs way(beppa dilution, asset sales, debt).

i dont think people are going to get rich on this one, it will either be a slow death or an even slower recovery, but to blame BB is plain wrong and belittles the intelligence of forum members.

btw i think BB is on an overseas vacation.

I think you meant BBI dilution not BEPPA dilution? BEPPA was a loan to BBI, so unlikely it gets diluted.

It's true that BEPPA holders may end up taking a haircut, when / if BBI goes into receivership then BEPPA holders would expect less than 100% recovery. But that's not dilution.

BBI holders on the other hand certainly have some dilution in front of them. The very best scenario here is that they sell enough assets to clear their immediate refinancing issues, and then the BBI stock surges in value, at which point they do a secondary financing to further raise liquidity.

persistentone · 6 July 2009

banska bystrica said:
As you would know select or mccrae or fluffynymph or whatever name you go by, I am indeed posting from a little town called Zilina in Slovakia. Going to Prague by train tomorrow. You doubted me last time so go to the other site and check out the IP addresses.

Now, if any member did actually did follow me they would have been loading up in November at around 3c and they would have sold immediately the Corus news hit at circa 17c, maybe a tad higher. Now that is a mighty fine return in seven months by anyones standards. Even you would be happy with circa 500 percent.

BBI is not dead. Far from it, however, the equity holders are at extreme risk of being diluted to next to nothing. BEPPA holders sit tight, once DBCT is sold, you are home for the tea money.

I agree with the last point you make relative to BBI and BEPPA. I would like your opinion: if you were looking to establish a new position in BEPPA would you be a buyer now or would you be holding for another dip below 9 cents?

Probably it's not fair of you to look at a six month period and pick the low point and the high point. But I wasn't here in November, so maybe you were indeed issuing specific calls for people to buy at 3 cents.

persistentone · 6 July 2009

BB, I went back and read your old posts on BBI, and you are very astute. It's great to have someone like you here, and I hope you will become a regular here again.

Have you done any analysis to determine what percent recovery BEPPA holders might see if BBI goes under? Since it is one of the key scenarios for BEPPA holders, it seems to me that use case has to be quantified.

What other markets are you chasing besides the ASX? In the ASX, have you studied RHG and what is your opinion on that one? I noticed you follow mining stocks. I probably stay a little closer to things that have real revenue and positive free cash flow.

What other situations do you like now?

persistentone · 6 July 2009

Here is proof the market sometimes just gets it WRONG. In March when BNB went under, the BBI and BEPPA suffered declines. But in fact BNB dying HELPS all of these children, by removing the vampire bat that was sucking them all dry. There should have been a tremendous rally because BNB went under. The market got the dynamic all wrong.

Can someone familiar with the BNB ownership structure let us know what if any of BNB's rights or ownership in the children might transfer to their creditors under receivership? Or is BBI likely to remain a completely independent entity even after BNB emerges?

nathanblack · 6 July 2009

persistentone said:
Here is proof the market sometimes just gets it WRONG. In March when BNB went under, the BBI and BEPPA suffered declines. But in fact BNB dying HELPS all of these children, by removing the vampire bat that was sucking them all dry. There should have been a tremendous rally because BNB went under. The market got the dynamic all wrong.

Can someone familiar with the BNB ownership structure let us know what if any of BNB's rights or ownership in the children might transfer to their creditors under receivership? Or is BBI likely to remain a completely independent entity even after BNB emerges?

BNB were forced by creditors to sell there stake in BBI(8.9% from memory) and BNB management rights have been terminated for one-off payment. with the exception of BBW who paid about $40mil termination fee, the other "children" got off lightly.

now its getting to the point were the assosciation with BNB is detrimental, yet there is no connection between the two anymore. but as mentioned on here a while back, the costs of changing name, letter heads, etc is a waiste of much needed funds right now and will have to wait.

nathanblack · 6 July 2009

persistentone said:
I think you meant BBI dilution not BEPPA dilution? BEPPA was a loan to BBI, so unlikely it gets diluted.

It's true that BEPPA holders may end up taking a haircut, when / if BBI goes into receivership then BEPPA holders would expect less than 100% recovery. But that's not dilution.

BBI holders on the other hand certainly have some dilution in front of them. The very best scenario here is that they sell enough assets to clear their immediate refinancing issues, and then the BBI stock surges in value, at which point they do a secondary financing to further raise liquidity.

yes i meant BBI dilution as a result of BEPPA being converted to ord shares. but also there is a small chance that BEPPA itself can be diluted because BBI could chose to raise more funds via debt, and the BEPPA terms only allow for future debt to rank equally with BEPPA. Meaning BEPPA cant fall further down the food chain as a creditor, but could find themselves ranking on par with new creditors.

BBI - Babcock & Brown Infrastructure

Gunlom

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