Let’s do our own BBI stress test. Feel free to contribute.
I will take Wilson HTM’s net equity figures as per their report on March 1 2009. Wilson HTM have been consistently quite negative on BBI so using their figures might be a good starting point for our stress test.
DBCT $772M PD Ports 460M Euroports 405M Westnet Rail 215M Powerco 291M IEG 530M CSC 1M Tasmanian Gas Pipeline 254M WA O&M 209M Alinta Gas 111M Multinet 30M Dampier to Bunbury Gas Pipeline 349M NGPL 953M
Total equity of $4.58 Bn
Let’s shave off a whopping 20% across the entire portfolio to bring equity down to $3.66Bn.
Now lets take off corporate debt of $1.3Bn. That gives us $2.36Bn.
Now let’s allow for SPARCS ($140M) and BEPPA ($780M). These two debts total $920M.
That leaves $1.44 Bn.
Now lets strip out the entire Goodwill of $1.4Bn (not that goodwill is worth zero but we are stress testing).
That leaves us 0.04 Bn or $40M which equates to a net value of 1.6c per BBI security.
So we can see that a 20% devaluation of assets across the entire portfolio does wipe out all of the equity for BBI holders. Under the above scenario, BEPPA holders receive $1 for each BEPPA. Food for thought.
BBI Price at posting:
4.5¢ Sentiment: LT Buy Disclosure: Held