beppa, page-87

It's ALL about dilutions and survival melua.

- dilution from the SPARCS bonds
- dilution from the BBI Networks bonds
- dilution from the preference shares
- overall survival of BBI


When the share price and prefs (and both sets of bonds as well) hit their lows it looked like the 3 dilutory factors above were all going to happen in a worst case scenario for BBI. However, since then:

- Powerco sale removed immediate threat of loan covenant breaches by paying off debts falling due.
- Large SPARCS holders offered to defer maturity for a year in exchange for better terms, deferring potential dilution for a further year and giving the company more time for asset sales.
- DBCT sales process seems to have attracted reasonable bidders (and perhaps news of the bids has also leaked out)
- 'Sweep' facility will ensure company is forced to pay down debt as soon as assets are sold. This includes the BBI Networks bonds and this removes further dilution risk.

This better news have seen the share price increase. The removal/deferral of the potential dilution of both sets of bonds, plus the potential for these to actually be paid back, well this is the beginning of the reversal of the DEATH SPIRAL that caused the share price to tank in the first place. This is why the share price is going up. It's quite logical really.