beppa restructure??, page-49

Dargie, I have a very extensive spreadsheet model for the asset and corporate debt of BBI, so let's attend to detail and not make generalizations.

If DBCT is sold for $2.8B or above, they are able to pay off the vast majority of the corporate debt. With most of the corporate debt repaid, it's perfectly reasonable to believe that BBI could ask for (and receive) a relaxation of the sweep requirement, which does give them the ability to start buying back other debt.

If DBCT is sold for $3.1B then basically all corporate debt can be repaid, and they are able to use EBITDA as they like.

As I said, IF they sell DBCT (for a good price), THEN it does not make sense to restructure BEPPA.

If DBCT is not sold, or if DBCT is sold for a poor price, then yes I agree they would not have the flexibility to buy debt.

At the end of the day, I think the "consortium" of coal companies that has effectively destroyed all bidding competition for DBCT will low ball the price at an EBITDA multiple of 9 or less, which gives us so little net equity in the sale that I don't think it makes a whole lot of sense to do a sale at all. Better to let the bankers sweat and wait for a day with a better sale price. In that environment, some kind of restructure proposal is a certainty, but it's a bitter pill for BEPPA holders because as soon as the BBI share price recovers I am sure they would immediately dilute us again with a capital raising.