bbi break-up 'would deliver greater value'??

Here is the news I saw from http://www.theage.com.au/business/bbi-breakup-would-deliver-greater-value-investor-20091022-hbd5.html

BBI really has no hope at all?

BBI break-up 'would deliver greater value': investor
STUART WASHINGTON
October 23, 2009
A BREAK-UP of Babcock & Brown Infrastructure would hand preference shareholders the rights to assets valued at 70c a share, one of its shareholders has argued, well above a 43c-a-share offer now on the table.

And Bronte Capital Management says broker valuations show exchangeable preference (EPS) shareholders could receive between 12c and 64c a share from the sale of BBI's Australian energy transmission and distribution businesses.

The calculations contrast with BBI's estimates of a nothing to 14c-a-share return for the EPS shareholders in the case of a break-up and sale.

Bronte Capital's chief operating officer, Simon Maher, said yesterday that the present deal was ''highly unattractive'' for EPS shareholders.

EPS shareholders must vote 75 per cent in favour and ordinary shareholders must vote 50 per cent in favour of a $1.8 billion recapitalisation of the debt-laden BBI for it to go ahead. The proposal includes a $625 million injection by Brookfield Asset Management and its $295 million purchase of BBI's prize asset, the Dalrymple Bay Coal Terminal. It also includes a $104 million dividend, or 4c a share, paid to ordinary shareholders.

In an exchange of letters with BBI, Bronte Capital established EPS holders had unchallenged rights to a sale of the transmission and distribution assets held within a special vehicle called BBI EPS.

The assurances contradicted earlier suggestions from BBI that these asset sales could benefit other debt holders.

''Collectively, we think the value there is in excess of 43c,'' Mr Maher said yesterday.

But BBI's advisers say a break-up would create a high degree of uncertainty, putting the company on a path to a sales process managed by banks, and even bankruptcy.

The independent expert has warned that the company's asset sale program is unable to fund a $300 million debt repayment due in February.

And on BBI's calculations a fire sale of assets would lead not only to shareholders being wiped out, but to EPS holders receiving no value and banking syndicates owed a total of $9.2 billion losing $250 million as well.