melua's bbi restructure, page-36

ifandwhen: I think you are being too flippant. The point Melua is indirectly implying is that BBI needs to have equity raising options - as one of several methods - for financing its way out of its hole. BBI stock has no possible value today because BEPPA sits over it like Dracula and sucks all life out of it. He is simply trying to build a scenario where BBI stock can be given life again, so that - for example - a cornerstone investor could be brought in. Such an investor won't even talk to BBI today until the threat of dilution is removed.

While I agree with Melua's theory, my fear is that any cornerstone investor won't give a fiddler's yip about BEPPA or BBI holders, and is likely to be a private equity type that will take whatever he can out of any investment, and leave the existing holders dry. He will take our potential dividend as interest on a convertible investment. He will dilute us as soon as we reach a conversion price. So we might be left with a vehicle that pays out its EBITDA to the new investor, and caps our upside severely.

Almost any scenario where BBI can recover from self-funded EBITDA to a place where it can convert BEPPA and *then* do a capital raising in a better market condition would be preferable. I haven't run the numbers, and I don't know if BBI can pull that off. But if you want to believe that we are entering the beginning edge of a recovery, they might be able to do it. For me it would be a more honorable death to attempt such a self-funded recovery than to give the company away to private equity.