BBP - Babcock and Brown Power

[roland]

ha, ha - I wonder why BBP left it to market close before announcing "No Distribution"

Worse than I thought - I knew it would be less than expected - but none!

BBP DECIDES TO NOT MAKE A 2H08 DISTRIBUTION AS PART OF A
CAPITAL MANAGEMENT PLAN TO STRENGTHEN BALANCE SHEET
Babcock & Brown Power (ASX:BBP) has decided that it would be prudent
to not make a distribution for the six month period ending 30 June 2008
amongst a range of capital initiatives it is investigating to strengthen the
balance sheet and enhance long term returns to securityholders.

 

[stock_dexter]

Although it's unfortunate that they announced zero distributions for the period, as a relative value verus the stock itself I'd rather maintain the share's capital value (and going concern status!) than get a few bucks now. Hopefully the market sees this as a prudent step in navigating some pretty treacherous waters.

I disclose holdings in BBP

 

[DionM]

Not impressed, to say the least. If their cashflow is "as normal" why the cut to distributions.

Into the very full bottom drawer BBP goes.

 

[stock_dexter]

Retain cash to reduce debt...I thought it was pretty simple.

I think the market reacted more to the hint that Apache is going to impact earnings moving forward more than the "immaterial" amount they originally advised.

 

[roland]

Retain cash to reduce debt...I thought it was pretty simple.

I think the market reacted more to the hint that Apache is going to impact earnings moving forward more than the "immaterial" amount they originally advised.

Yes, it was pretty simple and the only move they could have taken.

I disagree that the distribution was "immaterial", near on 10% tax deferred couldn't be called immaterial. In fact, up until I gave up, it was the only thing keeping me with BBP.

So far I have 2 out of 4 predictions correct, only 2 to go:

Yep, a gamble would be a good term for any further "investment" in BBP. Anymore bad news and it will get smashed again.

What if BNB are not able to refinance the outstanding shortfall - smashed
What if the repairs to the gas pipeline gets delayed - smashed
What if there are problems with the other power stations - smashed
What if, the most likely downgrade, on the dividend yield is more than expected - smashed

Please excuse me for being bitter, but this one cost me over $60,000. I do, however, wish any one still holding the best of luck

 

[DionM]

Retain cash to reduce debt...I thought it was pretty simple.

I think the market reacted more to the hint that Apache is going to impact earnings moving forward more than the "immaterial" amount they originally advised.

Was it a hint about that, or was it their way of making up a shortfall in funds by not giving a distribution? They haven't really said.

Still, I have learnt a very valuable less lately - dividends are never guaranteed (yes, I know, there never was a guarantee, but you know what I mean).

I used to have respect for the CEO. Maybe he should have stayed as power station energy trader (which he was good at) than trying to run a big company ...

 

[stock_dexter]

Today's announcement...

BBP SELLS URANQUINTY POWER STATION FOR $700 MILLION
* BBP has sold its 100% interest in the Uranquinty Power Station to Origin for an on-completion value of $700 million
* The gross sale proceeds represent a price of $1,094/kW – materially above the expected total project cost
* The net proceeds from the sale of $159 million will be deployed to pay down a portion of BBPHi debt

Good start

 

[closeys]

BBP

Wots going on with BBP ?
Will they get out of this hole ?
Im a newie to this forum so any help you can give would be much appreciated

 

[bryaneasy]

I guess we just don't know - I honestly beleive this stock will come good, however it will come good a slow pace - it just has to survive this rough ride at the moment. It is anyone's gamble, one which I have taken on .

 

[roland]

BBP smashed again - not like it wasn't on the cards. Also noted that their assets are not getting full book value on asset dumping. Sort of like a rock and a hard place.

How low can it go - dead cat bounce?

 

[DionM]

For better or worse I just bought more at 30c.

Stupid or not ... I don't know.

Ironically I just doubled my holding ...

I still have faith in this type of asset ... I do believe much of the downward spiral is due to BNBs woes and media coverage.

Ah well, I'll just work more overtime to service the loan ...

 

[bryaneasy]

Yeah to make things worse i had like 11,000 shares in this stock (which is ok it the most I would like to be exposed in any one stock), and then on Friday last week I found out that Westpac had put through an order for an additional 20,000 shares (I was previewing live market rates and clicked back on my browswer thats all I ever did)!! rediculous as I never clicked submit order button for this transaction and now their broking devision is giving me the complete run-around, but yeah I don't know what to do there.

Really down about this one - if it ends up me being liable, which is probably what will happen knowing these companies, what are the options for this stock, I did read up something about this share privatising possibly, in that event what happens to the stocks you own??

Kind Regards,
-Bryan

 

[Smurf1976]

BBP smashed again - not like it wasn't on the cards. Also noted that their assets are not getting full book value on asset dumping.

Tamar power station (Tasmania).

Hydro (100% state govt owned) sold the site with old generating plant for $30 million and BBP then spent $220 million building new generating plant there which is not completed (it can't run at all at present). It will cost about $140 million to complete.

Now it's being bought back for $100 million. That's the new plant ($220 million spent so far) plus the old machines bought back as well. A rather nice deal from the buyer's perspective.

 

[DionM]

For better or worse I just bought more at 30c.

Stupid or not ... I don't know.

Yep, it was stupid. I knew it. Falling knives ... when the hell will I ever learn!

I think all I can do now is sit and wait and see if there is a buyout or a carve up of assets ...

 

[jayinoz]

Yep, it was stupid. I knew it. Falling knives ... when the hell will I ever learn!

I think all I can do now is sit and wait and see if there is a buyout or a carve up of assets ...

U not the only one to be cut by the falling knife. I tried to grab the knife at 40c (Day B4) if that makes u feel any better.

If there is an immediate carve up of Assets we may get something in the 20s. Yet they will drag it on till a slow death I am sure.

Might as well place everything I have associated to B&B in the very bottom draw. Along with Centro & some failed miners. No joy this year.

 

[asx256]

there are rumors of a take over bid from org, and they are offering in range of $0.65-$0.75 for all assets.
current market cap is 116,212,620 @ $0.16.
@ 0.70 it will give BBP market cap of 500 million.
imo this is best situation for org at the moment (considering BG's offer)

good for org shares holders but no so good for share holders who bought BBP at higher prices.

 

[AjD]

What get's me with this is that Analysts had a target price on this thing of about $2 as late as June. The share price sh!ts itself and all of a sudden target prices have gone through the floor. Aside from an asset sale and the fact that they had to impair some goodwill because they paid too much for the bloody thing (which everyone knew anyway) the business is unchanged.

Where is the responsibility of these guys to actually make a decent recommendation, rather than just change their opinions after the fact... F%$king useless

Well, thats my rant for the day...

 

[prana]

they are guides made only from what they know at the time. It's your money, they didnt make you buy it with a gun to your head - certainly not to mine when I bought into it... I've gotta take my own responsibility for my own actions. I'm not happy about it but as wise men says, "don't ask the barber if you need a haircut". Many of us, myself included made huge paper losses but dats what they are, in the sentiments can transfer itself directly into fundamentals, and that is something we've observed more times than not recently. This is a bear market ... you disappoint, you get a wallop or 10.

Live and learn, move on. It's part of the lives we live.

 

[RodH]

BBP has been doing ok of late, how much further do we think it'll rise? its getting back up towards august levels, up from the dark days of babcock and brown in november

 

[Malindidzumu]

Does anyone out there still hold units in BBP? If so I'd be interested to hear what you think the prospects for the company going forward are? Management seem to be confident not only of the survival of BBP, but the recovery and growth of the company in the future given expected higher market prices and the subsequent significant increase in revenue beyond 2010. What does everyone else think? Does anyone share the view of BBP's management?