the buying continues, page-47

thanks for the response. However, would like to address your opening comments: Sorry for using caps, not yelling just making it easier to respond to your comments.

What has changed is BBI's free cash flow and that is due to two things.
1. The recession in Europe deepening in 2009. This has affected PD Ports and Euroports. ACCOUNTING IS HISTORICAL AS YOU KNOW. BY ALL ACCOUNTS THE RECESSION IN EUROPE APPEARS TO BE EASING. WHILST STILL CLOUDY DAYS, DEALS ARE HAPPENING AND CERTAINLY APPEARS LESS SEVERE THAN THIS TIME LAST YEAR
2. BBI's banking syndicate tightening the interest rate noose. YEP, WE ALL KNOW HOW BANKS BEHAVE. HOWEVER, BBI IS PROBABLY THEIR BEST CUSTOMER. HUGE MARGINS ON THEIR DEBT AND IT STILL SERVICES THE INTEREST BILL
The corporate debt ICR is now at very dangerous levels compared to Dec 2008. LAST REPORTED INTEREST COVER WAS 2X AT THE CORPORATE LEVEL. STILL COMFORTABLE IN MY BOOKS
The DBCT sales process has failed. I would not have envisaged that back in December. I AM NOT SURE IT FAILED. THERE IS AN INVESTOR AT THE TABLE FOR HALF WHICH WAS ALWAYS YOUR PREDICTION. I THINK MANAGEMENT COULD BE DOING THE RIGHT ACTION AND HOLDING BACK FROM A SALE AND RATHER ISSUING EQUITY. I FULLY UNDERSTANDING ALL OF THE ISSUES AROUND DILUTION ETC. HOWEVER THERE ARE PLENTY OF EXAMPLES OF DILUTION BY COMPANIES WHO HAVE STRONGLY RECOVERED. JUST LOOK AT SGP AND GPT. DILUTION BUYS TIME AND ALLOWS EXISTING INVESTORS TO ENJOY THE RECOVERY. A SALE IS PERMANANT. THE ONLY PERSON WHO BENEFITS FROM A SALE IS THE PURCHASER. EXISTING SHAREHOLDERS MISS OUT ENTIRELY.

Time will tell and you may well be right in your analysis. As you have said in many of your posts its us retail punters who are in the dark and trying to interpret all the public data etc.

However, one factor that gives me a level of comfort with this stock is that BBI is paying their interest to the banks comfortably. It is rare ( I cannot actually think of any cases) where a bank/s calls the doctor into a company that has been paying their interest. It is very difficult for a bank to sell up a customer in these circumstances. The banks exposures are not growing in fact they are decreasing and the world is looking like a better place than last year. The lender positions have only improved as conditions have got better. Companies with CRAP assets going into receivership but good asset and cash flow companies survive even though they have the wrong capital structure which management is addressing.

It will be a brave bank executive who tells his boss " I did a great job this year. I tanked BBI, the company that had highly regulated and stable cash flows that showed a strong interest cover and never defaulted. I turned up and sunk them. However, all the asset lenders have frozen the cash and my debt is only partially recoverable or worst still has been entirely lost" Bankers love saftey and comfort and whilst I agree that they want their money back they know being patient and sitting tight will be there best chance here given the improving conditions.

My usual disclaimer: DYOR