nothing has changed people!, page-40

I am here pete. Today was golf day. I did not lose as much money as melua did though.

There is a heck of a lot of info to process and I will have to study it tomorrow before I make some detailed comment, but for now:

1. Not a lot has changed overall, but the presentation of clear numbers and figures has for now soothed any fears of any immediate failure.
2. The realities however have not changed. There is no way $99m pa of free cashflow into the group is going to go anywhere near meeting the 82M pound facility due in Feb 2010 (although weakening pound is helping). This really can only come from asset sales.
3. The timeline of 1-2mths for DBCT news is quite short, so it sounds like the process is getting down to the nitty gritty. Cannot get any feel as to whether it will be 49% or 100%.
4. The removal of the trigger clause worries on the BEPPA is what I think caused the rally today. The issue remains however than servicing the BEPPA in their current form are unsustainable, especially if a massive accrual of unpaid interest continues to build up. If anything I am even more certain now that there will be some attempt to restructure these. The BEPPA issues in their current form are insurmountable in my opinion.
5. A lot of the cashflow from their assets is not flowing through to HO and is being swept at the asset level. This really crimps the HO cashflow.
6. Whilst the internalisation of the mgmt agreement is a good thing, financially in the short term it makes little difference as the fees were very little in the year just passed and likely to be very little in the current year. Still, to get it removed is a good result, and to get the staff as BBI employees on the payroll is good as well. The name does not make a lot of difference to the figures, but to steer away from the BNB name is good for sentiment.
7. I am concerned that the interest bill in FY2010 will be a lot higher than 2009 due to increases in the interest rate forced on them at the corporate level after the sale of Powerco was settled in Feb 2009. This will cut into the free cashflow.


I need to have a full and proper study of the figures before commenting further, but I think today's rise was as much a short squeeze if anything and once we sit down and go through the full figures we may realise that the problems are still exactly the same and the answers are still the same..........

- asset sales to pay off corporate debt
- dilution threat of BEPPA over BBI ords
- servicing of BEPPA threatens the company existence
- BEPPA existence blocks the path for a capital raising
- cashflow will not pay off the corporate debt Feb 2010