Understand your pessimism and cynicisms over BBP and anything BNB has their hands on is been pariah and I don’t blame them.
Their debt is clearly too high and I don’t foresee them being able to repay if they don’t sell down assets, that’s why the process of selling down assets and seeking expression of interest started late of last year, its been over 6 months now so we are expecting news this quarter as stated by BBP.
AGL, ORG and Sovereign funds have been widely speculated for a while now that they are among the several parties that has made a proposed conditional bid to buy parts or all of the business, and as I stated before cash wouldn’t be a main issue for strong cash balanced companies as they normally have the capacity to either pay off part of the debts or be able to re-finance at a significant favorable rate compare to the current BBP. AGL and ORG is probably looking to buy only parts of the businesses anyway, it’s the sovereign fund bids that I’m more interested in.
In response to the CPRS, although its still unclear what exactly the proposed penalties might be (consensus to be extra $20/t carbon), there is evidences that power companies is in a strong position to pass on this costs to the end user, and as demand for energy goes up so will price.
All should be explained in due course. Only 2 months before end of the quarter, I’m taking a gamble that this will be sorted out. GL all.
BBP Price at posting:
8.6¢ Sentiment: LT Buy Disclosure: Held
