sell assets v unlock equity(recapitalise)?, page-6

Nathan,

if offers for DBCT are low ball, how would it be possible to argue that there is equity in the deal for banks to refinace? By the way DBCT under regualtion, I believe, must operate close to a 60/40 debt equity. If debt is $1.8 billion the assumed value of DBCT is around $3billion. However, many here wil be happy with $2.7 billion. Therefore, I suggest there is no room to move with DBCT.

BBI is a part owner in NGPL. NGPL is doing expansion works. I doubt there is scope to move debt to asset level, as you would need other partner approval and borrowings would be committed to capex.

We know they were trying to move PD Ports corporate debt to asset level. This will be very difficult given the Corus news and property write-downs in the UK.

Ex-alinta assets would have very little room and WestNet needs more cash.

The only unemcumbered asset is the Tasmanian PowerCo assets from memory. I don't know if the is still the case, but there may be some possibility there to raise some funds.

Short-term debt will only compound market fears and uncertainity about future refinacings.

Mate your ideas are great, but IMO are not likely to succeed in this environment.

BBI, like REIT's, used increase in values (in the past) to fund capex and pay inflated distributions using borrowed funds. The GFC has put an end to this practice. BBI, like other entities are now paying the piper for past practices.

The only real way to sort corporate debt at the momment is to unlock equity through a big asset sale at book and above. This may be later coupled with a capital raising and a BBI/Beppa agreement. As to how this all plays out time will tell.

Cheers