Out of intensive care but still in hospital with an uncertain diagnosis imo. Much better than being dead, but...
The 2010 forecast of $288m EBITDA means BBP will continue making losses, given dep'n of say $150m and interest of say $200m. I can't see any significant improvement in subsequent years. The business is uneconomic with $2.9 bn of debt and will progressively consume equity.
They have say 6-12 months to begin a significant reduction and increase the equity %. Imo, asset sales and a rights issue are a certainty in 2010. Achieving a significant debt improvement with either option is far from certain.
If assets can only be sold at book value, the debt to equity ratio doesn't change much (so there's no point). The success of asset sales hinge on whether the $2 bn of intangible assets (goodwill) in the b/sheet has a value attributable to individual power stations, ie would individual power station buyers be prepared to front up with hard cash for goodwill of this level.
Vital as the bulk of $'s has to come from assets sales. Imagine the dilution from a $1bn capital raising (which would only reduce debt by 1/3rd). If the goodwill can't be converted to cash then asset sales wont achieve anything and a capital raising is the only option. After the euphoria, this issue will weigh on holders minds next year imo.
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