In order for this deal to proceed Beppa will need to be shown why any deal with the CI is better than a liquidation. The balance sheet issued just two weeks ago shows net assets of $1.7bn which ranks behind Beppa in a wind up. This means that Beppa is worth $1.00 and then there is still another $1.7bn of value according to the accounts.
Therefore for Beppa to be worth only 10cents All of the equity will have been lost plus another $600m of Beppa value gone.
So, $2.3bn was wiped out in just two weeks??
I think the Beppa holders may consider a wind up as a better alternative rather than take a deep dilution where the management will need to argue that wiping out $2.5bn of value was the best outcome by introducing the CI
The only way around this issue is to offer all shareholders the right to pariticpate in the equity raising or pay out Beppa an amount of money to go . 50 cents per unit maybe
DYOR.
BBI Price at posting:
4.7¢ Sentiment: None Disclosure: Held
