i think i know why bbi have taken this path

Having had some time to reflect on this week's developments, and having read the posts back and forth the past day or two - especially those posts registerting disgust about why the asset sales process which was said to be going well has all of a sudden changed - and now I can see why all of a sudden they have taken this path.

It is either:

1. Asset sales bids are poor. This however does not tally with what they were saying at the full year annmct on Aug 26. I still they had reasonable bids to take, however.......

2. I think the PD Ports rollover is the problem and that the lenders have put the pressure on BBI to raise the money now and not later.

If BBI was to sell DBCT, even for a good price, and the money gets swept, where does that leave PD Ports lenders in terms of priority? Worse off of course. A key piece of BBI equity has been sold and as they have the earliest maturity, they want to reinforce their position. This is why the rollover date is so short. Why would you want to rollover this debt past Feb 2010 and let the loan maturing then go in front of you?

So therefore BBI has had to take a different path and that is the recap path. They could not risk the PD Ports debt forcing them into administration. As far as I can work out, it looks like PD Ports corporate attached debt will need to be repaid as part of the recap of the company. They need to get this off their backs, as well as the $1.2B.

They didn't really have a lot of option really. I am sure this is a path they did not want to take.

Interested in hearing other views