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BBP - Babcock and Brown Power

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ok i just read the announcement

its most likely bad news

The reason for the trading halt is that BBP is currently unable to make an immediate
announcement pending the finalisation of a number of matters that are likely to have a
material impact on BBP, including a revised outlook for BBP’s business.
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the first line about being unable to make an immediate announcement....well whats the hurry.... nobody was rushing them right? so is there a need to have a trading halt. what they probably mean is, our sp is probably gunna get an extra flogging from insiders and set the mark for major flogging when the news comes out, so we're gunna do what ALL did and put a trading halt to minimise shorting

"a number of matters", look up matters in the thesaurus, coincides with "issues" etc. highly negative

"revised outlook for bbp's business" as opposed to "improved outlook for BBP's business" if it were positive news. Directors would usually be eagre to announce or subconciously hint at good news.

this announcement is wrapped in negativity.

im preparing for the worst lol
i dont hold bbp, but this is gunna affect bbi
the only positive thing i can see from all this is that i may be able to lower my average purchase price, lol
 
fureien said:
im preparing for the worst lol
i dont hold bbp, but this is gunna affect bbi
the only positive thing i can see from all this is that i may be able to lower my average purchase price, lol
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No point throwing good money after bad if it hits the fan, we will just have to accept it unfortunately
 
investorpaul said:
Has BBP suffered because of its debt levels and link to the B&B group? if yes how would its position compare to BBI? eg more/less debt, better/worse assets
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I think BBP had lots of corporate loans from BNB. It could be the BNB receivers calling in their money. BBI doesn't have the same exposure owed to BNB.
 
the reason for trading halt

MELBOURNE, May 13 (Reuters Basis Point) - Babcock & Brown
Power Ltd (BBP.AX) (BBP) is in talks with its lenders to amend
the terms on a A$2.6 billion ($2 billion) project finance loan
to give it breathing space to sell assets, banking sources
said.

The terms of the loan mean BBP needs to obtain a second
credit rating, from an agency such as Moody's or Standard &
Poor's, by June 3 or face a review event by its lenders, the
sources said. The loan is already rated BBB- by Fitch.

The power investment company, whose shares are currently on
a trading halt, had no comment when contacted by Reuters Basis
Point. UBS, which is BBP's financial adviser on potential asset
sales, was not available to comment.

"Under its current structure, and barring further asset
sales, BBP looks unlikely to get a second investment grade
rating by June," said Matthew Spence, infrastructure and
utilities analyst at Bank of America Merrill Lynch.

One possible resolution being discussed is to include
mechanisms in the loan structure which would allow any free
cash generated from BBP's assets to be used to pay down the
principal loan, banking sources said.

The sources cannot be identified due to the confidential
nature of the negotiations.

Holders of the loan include ANZ, BNP Paribas, Commonwealth
Bank, Dexia Bank, National Australia Bank, Natixis, Societe
Generale, UniCredit and WestLB.

BBP, which has seen its market value dive about 95 percent
in the past 12 months, has been looking to sell assets, or the
whole company, since October after receiving approaches.

It said on April 28 that the sale process is continuing.

Like its parent company Babcock & Brown (BNB.AX), BBP has
been punished by investors after the financial crisis saw
confidence its debt-funded investment model collapse .
($1=1.309 Australian Dollar)
(Reporting by Sharon Klyne; Editing by James Thornhill)
 
So what to holders think will we hear bad or good news tomorrow or could the trading halt extended till monday
 
max421 said:
So what to holders think will we hear bad or good news tomorrow or could the trading halt extended till monday
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Well if the above document is correct it doesn't seem like the annoucement will be overly bad.

Hopefully it's just some amendments to the structure of certain loans, Maybe a cash sweep facility similar to the one BBI's lenders have put in place.
 
What is the impact of the origin/BBP announcement?

Was it also the reason for the trading halt? or is there more to follow
 
Further to the announcement that BBP expects to release later today in connection with
the conclusion of a transaction and a revised FY09 EBITDA guidance, BBP requests a
voluntary suspension of trading. The reason for the suspension is that BBP is in the
process of ongoing discussions with its banking syndicate in relation to ascertaining a full
understanding of the implications of the revised guidance on BBP’s banking facilities.
These discussions are currently incomplete and thus BBP is unable to make an
immediate announcement pending their finalisation.

It is expected that the suspension will end when BBP is in a position to make a further
announcement in relation to those discussions, which is expected to be by the end of next
week (i.e. by Friday, 22 May 2009).
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I am very relieved I sold 25 minutes before the trading halt.. the news definately doesn't seem to be getting any better.
 
hope the Banks keep BBP going and dont do what they did to BNB. Lets see what material transaction are they gona announce later today. Since last year I have been following BBP they never come up with good news.

what happened to their east west portfolio offers. no talk about that at all just petty 100 million deal. what a joke.
 
Not bad announcement after all late in the afternoon looks like they will get the banks sort out the loans. Was expecting some power station sale though.
 
Unfortunately, the business is not performing well enough to even cover interest costs. Poor management to have the power plants not working and unable to supply Sth Australia when the heatwave was on back in January. Huge question marks over the BBP management team. The revised normalised EBITDA figures don't even cover their interest costs on my numbers.
I'd say the banks will do a re-structuring here and jack up the interest rate ala BNB and basically stuff BBP securityholders.
It doesn't look good at all. If they re-list I'll be out. I fear they may never re-list. My small position looks dead in the water.
 
I think the same. Its in history books now. how to get peoples money sucked in BBP management is good in doing that. Fisrt announcing asset sales news in this quarter so investors can jump in and then revise EBITDA down. Banks called in. suspension now. I have lost money on this one it seems. lost on bnb, now bbp and the last one left now bbi. Iam just sick of Babcock name now. I hold Beppa, now Iam thinking to sell them aswell before BBI goes down aswell.
 
SUNYA2006 said:
Power plant usually has a stable income origination and a good improvement prospect especially in energy shortage market.
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That is only true assuming the energy shortage is in fact an electricity shortage.

On the other hand, if it's a shortage of gas, coal, oil or whatever else the power plant is using as its primary energy source (fuel) then the economic wheels fall off in a big way and it ends up a financial disaster.
 
max421 said:
I think the same. Its in history books now. how to get peoples money sucked in BBP management is good in doing that. Fisrt announcing asset sales news in this quarter so investors can jump in and then revise EBITDA down. Banks called in. suspension now. I have lost money on this one it seems. lost on bnb, now bbp and the last one left now bbi. Iam just sick of Babcock name now. I hold Beppa, now Iam thinking to sell them aswell before BBI goes down aswell.
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Consider what return you would get from your BEPPA if BBI went bust...

IMHO, BBI is a different kettle of fish to BBP (and BBP isn't necessarily dead!)
 
Kinda ironic that it is the banks, who lent them money to buy the assets at inflated prices in the first instance, that are now trying to force the sale of those assets at huge losses to get all of their money back.
The bank wins all arround:
1. made money on the original financing deals;
2. makes interest on the ongoing loan;
3. makes more money at higher interest rates when the credit rating agencies downgrade bbp; and
4. will make more money when they ultimately finance the party that buys the assets.

Gotta love those banks.
 
ricee007 said:
Consider what return you would get from your BEPPA if BBI went bust...

IMHO, BBI is a different kettle of fish to BBP (and BBP isn't necessarily dead!)
Click to expand...

The thing your forgetting about BEPPA is that in the case of administration, holders may indeed recieve some cash, depending on the discounted assets in a fire sale ranging from $0.00-$1.

BUT how long will holders have to wait to see that money? winding up can take years, and they will no longer be a listed entity, so selling out wont be an option.

BBP and BBI are differnt and i have faith, but for those that dont, selling may be more appropriate than waiting years for a return of equity.
 
BBP signs an agreement for 105MWh to BHP's Olympic Dam project

Key highlights of the retail contract include:
· Two year term – the contract is for two years commencing on 1 July 2009.
· 105MW average load – the average estimated load is 105MW.
· The contract is priced in line with BBP’s forward outlook – pricing is in
line with BBP’s expectations for SA in FY10 and FY11.
· Strong counterparty – Standard & Poor’s credit rating for the counterparty is
A+ with a stable outlook.
· REC pass through – the cost of RECs is passed on to the counterparty at an
agreed price under the contract.
· CPRS risk factored in – expiry of the contract currently coincides with the
proposed commencement of the CPRS scheme.

Surely this is a very positive announcement and gives me confidence that BBP will be around for the future. BHP would not enter into such an agreement where the counterparty is unable to provide such a transaction...


Adding to this Guinness Peat a local fund has been accummulating a substantial holding in recent days.

I have bought in today, anyone else??

Benwex
 
I sold yesterday while there are still eager buyers. I believe BBP is now in breach of a debt covenant to the banks. It looks like a big gamble to me.

The generators will still be around in a few years time, but maybe owned by somebody other than BBP.
 
you guys realize that even if you buy BBP shares, you are protected by BBP's equity (book value), BBP is trading currently at about 6% of their book value.


I am trying to say there is a margin of safety here
 
This may have been answered previously but I see Guinness Peat Group Plc have a large holding of BBP stock. They are apparantly known for their activism and getting involved in restructurings and turnaround situations. Anybody have an idea why they're in there? What value do they see?
 
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