bearcuban12 wrote: "Hi Melua, I have been reading the historical...

bearcuban12 wrote: "Hi Melua, I have been reading the historical threads on BBI, which you are probably the biggest contributor. Seek your opinion/clarification on a few things.

I apologise if you feel that some of this has already been covered.

1/ You say that the way forward is to pay off corporate debt, but what is managements next step after the dividends have been reinstated? (or are they only thinking about how to survive short term?)

2/ On paper, I can see that the worst case scenario would eventuate with shareholders being paid out 50 - 70c per share for a forced fire sale of assets sold well under 2007 market values. What is the worst case scenario that you can see. i.e. what can possibly go wrong from here?

3/ What are the chances of the trigger action that results in a BEPPA for BBI share split, and if this eventuated, would it spell the end of any potential for BBI shareholders due to share dilution?

4/ What is the chances of the BEPPA shares not being able to be redeemed for the $1 amount in 2012?

5/ In regards to asset sales, I understand that DBCT is the most attractive asset with BBI having received unsolicitored offers. Does it not make more sense for BBI to try and hold onto this in the long term based on the massive expansion of the Bowen basin coal / gas seam?"

OK, on Point 1: Paying most or all of corporate debt off ensures they are not forced to negotiate with banks about conducting "forced" assets sales. At the moment, there is no pressure from banks to sell assets. BBI are doing it in case the banks play hard ball in 2009/10. BBi are doing it to ensure what happened to OZL does not happen to them. The dividend reinstatement is actually the final step in the recovery medium term. Once the dividends are being paid again, the risk for those of us whose average buy price is below 10c will be history. Trust me, if BBI start paying dividends again, the share price will be well and truly north of 30c, let alone 10c.

Point 2.
Worst case scenario is BBI is put into administration because they cannot pay off their corporate debt (assuming the banks do not roll over the debt when it's due). The administrators then go about selling the assets to pay the banks back. Worts case scenario is that after all the assets sales, there are zero funds for shareholders.
So worst case scenario if you buy BBI at 8.4c, is you lose 8.4c per share or 100% of your investment.

Point 3.
NO chance. See December 1 announcement on this.

Point 4.
No chance as the Board do not have to pay cash. Read the BEPPA prospectus for full details. It's available on the front page of the BBI website.

Point 5.
It would be great to hold on to DBCT, however, at the end of the day it's just another asset and if they can sell 50% of it at top dollar to pay off most of the corporate debt, they will do it. Would you sell half of ONE asset to ensure you cannot be forced into administration? I would.
Actually, DBCT is probably not their most valuable asset but that is the perception because it was their first asset ever bought and it's located in Australia.
I think BBI would definitely be trying to hold on to at least 50% of DBCT. The plan is to sell 100% of Euroports, 100% of Westnet and/or 50% of DBCT. It all depends on timing. If Euroports and Westnet are slow to sell, they may just have to bite the bullet and take one of the big offers for 50% or even 100% of DBCT. At least BBI have choices, which BNB and other companies don't have.

Hope that answers your questions.