"what are the chances of BBI going under (do we think)?"
I think there is very little chance of BBI going under but a reasonable chance of BBI ord holders being heavily diluted.
As others have mentioned, BBI SP seems to have little correlation with good / bad news and seems to have more to be with big players moving in and out. Therefore to judge the health of the company based on SP is very risky IMHO.
So what if there were no asset sales achieved?
A. They have +ve cash flow so no reason to go under there
B. They have Bonds / SPARCS / Pref shares to pay out but if they cant they can convert these to ord shares. No reason to go under but BBI ord holders have significant dilution risk
C. They have to refinance loans.
-Most loans are non recourse.
-Most loans are against profitable companies.
-They have managed to refinance loans at the corporate and asset level in recent months.
-Credit crisis has continued to ease since refinance so future refinaces should in theory be easier for euivalent assets
-The most important loan is the corporate loan which has been refinaced subject to hight interest charges and a sweep. I can't sen that being called in.
Given the above, my worst case scenario is that
- all funds get swwept
- some assets get liquidated if ther cant refinance but any short fall in non recource.
- Bonds / Sparcs / BEPPA get converted to ord shares
- BBI SURVIVES but ord shares are significantly diluted.
I simply cannot see why BBI - the company - will go under.
For the reasons above I hold BEPPA
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