market cap and nav, page-36

Hi Harry,

"Have you factored in when and how this will be paid? I always consider that if I sell my BEPPA's then I forego the 4.35 cents on each security"

BBI are under no obligation to re-instate dividends UNLESS they want to raise new capital by issuing new BBI shares. So for the forseeable future i see no reason to make payment of arears. And its unlikely that they could.

Once DBCT is sold, it is likely to see a loosening of the bank sweep and if not, its only a matter of time until the freecashflows has wiped out corporate debt entirely. At that point BBI can start thinking of getting up to date with dividends.

As you said, if you sell on market you forego the dividend accrued. Thats part of why their is a premium over ord shares, less risk and accrued divs.

If BBI make an OFFER earlier than 2012, they are under no obligation to give you $1+interest. But if they offer you say 2xBBI share for each Beppa, it is possible that you will come out ahead, ie BBI 20c, BEPPA 35c. 2xBBI=40c. So if you had the choice of onmarket sale at 35c, or conversion into BBI@40c it may be tempting.

My guess is BBI will monitor the NAV and two share prices, IF and WHEN the scenario arises where an early conversion at realistic ratio becomes feasible in relation to share prices, the offer will be made.

IF they force early redemption using a clause like change of control or 12months since dividend defered, then they are obliged to convert the full $1+interest. So this will NEVER happen as the power to force conversion lies solely with BBI and not BEPPA holders.

If the two share prices never allow for a fair early conversion, the BEPPAs will naturally mature in July 2012, at which time holders are entitled to full $1+interest. Most likely in script, at which time BBI share price and NAV will most likely be substantially higher than today and dilution minimal.

In 2012, or the lead up to, BBI have many options to deal with BEPPA. They can attempt rollover in full or partial, sell further asset(s), seek loan, or raise capital via SPP.

I doubt very much if BEPPA holder will recieve dividends before 2012, its more prudent to pay other debts first, especially at higher interest rates.

Cheers.