analyst recommendation of 27 march 2009

Although the following information is a few weeks old from Huntley, it does reinforce some comments by the likes of Dargie and Melua..

"Finances are so tight BBI has had to offer a formal due diligence process to a shortlist of parties interested in owning part or all of the best asset..DBCT. A sale would repay hundreds of millions of dollars of debt... or over a billion depending on the size of the interest sold. Anticipation of this should support the security price. "

"Even in the depths of the credit crisis BBI was able to refinance maturing debt, reflecting bank confidence in the assets and their cashflows. On 31 December and at the time of the interim result BBI complied with all debt covenants. We think BBI will survive – just."

"The group has a mountain of debt to repay before it could resume distributions, this will take time and meanwhile we can’t know the final asset portfolio after the radical asset sales ahead. Therefore we can’t forecast earnings and cashflows. However, there is a good case for speculating in BBI by traders with a very high tolerance for security price risk and capital loss. Should the market’s extreme risk aversion of the last year continue to recede there would be upside of multiples of the current security price. BBI was one of the stocks dumped the hardest in the credit crisis and bear market, so it has some of the most upside if conditions improve."

"We are not going to advise on trading prices and timing; speculators will have to make their own decisions...We just argue investors who have decided speculating is for them, limit specs to a small proportion of their portfolio and who want to punt declining risk aversion in markets should consider BBI. There is also speculative upside over time from asset sales and debt reduction..."

Source: ETrade 'Huntley's Recommendation"

I hold BBI and BEPPA