my analysis of today's announcements, page-37

Melua,

it is quite simple. In November we thought they would get through because they would produce $300m in free cash flow. To see what happened in short is quite easy. They ended up with $99m free cash (which could be applied to corp debt), an extra $170m extra in interest charges (due to falling ratings and banks increasing margin) and had to fund $30m odd in debt reduction at asset level (due to the write down in assets such as PD Ports).

Add them all up and you get your $300m. To alleviate the problem they need a good asset sale (DBCT) and/or to raise capital to clear the corporate debt.

The assets themeselves need capex expenditure and as they are now finding it hard to borrow at asset level, this needs to be funded from free cash flow. The GFC is easing but getting debt finance is still hard. The real solution is to get rid of corporate debt and fund from cash flows until normality returns.

It's just like an injury. You may feel better sooner than the time it takes you to fully recover. You will recover sooner with good treatment (clear corporate debt) although it may be painful short-term, long-term you will be better for it.

BBI will survive, but need to take their medicine early for all holders sakes.

Cheers