Ann: Revisions to AET and D Option Structure , page-38

There may be more negotiations underway on maximising the return to all BEPPA holders with the sale of the AED&T assets, in addition to those already agreed to by BBI & BAM.

from SMH today:
"Babcock and Brown Infrastructure has been finding that some of its EPS hybrid holders are hard to please.

The company and its proposed cornerstone investor, Brookfield Asset Management, last week revised the terms of the payment to EPS holders under the $1.8 billion recapitalisation deal to allow them to receive potential upside available from the sale of the old Alinta assets.

EPS holders previously had been set to lose any remaining security over BBI’s Australian Energy Transmission & Distribution division in return for a 43-cents-a-unit payout.

BBI and independent expert Grant Samuel (and Brookfield, for that matter), seem to think there is very little value remaining in AET&D beyond the amount of debt held in the business.

In that context, it last week agreed for the new manager of the assets, Brookfield, to distribute any upside from the sale to EPS holders on top of the proposed 43-cents-a-unit payout.

The previously unhappy EPS holders, led by Bronte Capital, think the amended proposal in theory is a step in the right direction.

However, they add the devil is in the detail, and told Insider they still have the following complaints:

1. The sale process of the AET&D assets is still in the hands of BBI & Brookfield.
2. The BBI EPS holders will not control the assets – that is, BBI & Brookfield will simply sell the assets – there is no capacity to recapitalise them for example.
3. There appears to be no one with fiduciary duties to ensure that the sale process is undertaken for the benefit of the BBI EPS holders – one suspects that the assets could simply be sold as quickly as possible by BBI/Brookfield.
4. The fees proposed to be paid to Brookfield are excessive.

But even though these EPS holders are unhappy with some of the terms, it could be irrational for them to vote down the deal given that even they recognise returns from an administrator could be less than the 43 cents on offer."

As this is still continuing to unfold there is a good window for the BEPPAs to attract even more upside before conversion takes place at 7PM on 16th November.

All BEPPA owners should be smiling!