causes for concern for bbi

Three announcements:
1. Sparcs (BBN010) Bond holders will be able to withdraw their conversion requests

2. One of the infrastructure assets 20% owned by BBI will be able to refinance its debt (allbeit at a penalised interest rate)

3. The Euroports sale settlement has been delayed by three months.

BBI price goes up, catches Beppa.

Very interesting.

Clearly BBI management do NOT yet have certainty over the reset date to May 2010 of sparcs bonds being approved, so they are trying in two ways at least to mitigate this.

1. Minimise the number of convesrions by allowing withdrawal of conversion notices.

2. Push the price of BBI towards the 17.5c minimum conversion rate to make it more attrcative for sparcs holders to vote for reset (at the moment minimum VWAP for conversion at any time is $1.75)

The refinancing announcement By DBP is a red herring, if DBP could not refinance BBI was poked, any business paying its interest is a lot more attractive to banks than many of their existing businesses which they are supporting but are NOT paying their interest. If they ditch interest paying businesses with regulated strong income streams the banks themselves will go Broke(r).

Beppa looks the only game in town at the moment given these issues above. Melua, I suggested converting Beppa to Melua a couple of weeks back when the gap was over 2.7c, most poo pood the idea, but this will not be the last time at these levels swapping is possible. i hope your mate did it he would have another 100,000 Beppa for nothing if he did.