Issue of BBIPL not repaying BNB,therefore allowing $600m in noteholder liability, to be paid out to noteholders.......is likely to go through the courts.
BBIPL acknowledge owing the money NOW, via a guarantee to BNB Noteholders, so why is BBIPL still trading, given they cannot repay its loan to BNB...?
How can BBIPL still be deemed solvent.?
BBIPL say the noteholder debt is unlikely ever to be repaid.
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This is exactly what was announced on the 13 th Feb 2009, via ASX:
"Under the applicable subordination arrangements, BBIPL can only repay funds to BNB after it has met its subordinated arrangements,BBIPL can only repay funds to BNB after it has met its commitments to its syndicate of bankers...."
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My comment:
....nobody disputes the fact that bankers have to be repaid first (we won't discuss the 20% PA surcharge, wacked on by the banks )
.... however, what is the difference in this situation, compared with other company liquidations......whereby also bankers have to be paid ahead of unsecured creditors.
The model which has tried to be put into place here by bankers and management, means that in all other cases insolvency would not apply, where their is secured debt.
Gearing is almost always involved, whereby security is held by banks.....BBIPL bankers in this case, would have it OK for operations to continue, as per usual ( managment statement) pending exclusive servicing of their banking interests.
This is never been the way it works anyway...the whole concept of administration, is the involvement of an independant third party to fairly look at the interests of all parties.
Banks have imposed a 20% PA fee on their laons....what is to stop an increase in that fee to 30 or 40% PA.
BBIPL cant pay all of its creditors (noteholders) NOW....they are insolvent, and an administrator needs to be appointed
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There is something very wrong here. It is hoped that those responsible (including bankers) be bought to account.
BNB
babcock & brown limited
