No, quite the opposite ... BBSN holders (BNBG and BNB010) are in a powerful position.
- There is abundant evidence of failures of governance within BBL and BBIPL. ASIC and Deloitte both have a history of observation and recommendation - that was ignored
- The public statements around the profit guidance (mid 2008 the guidance was only slightly reduced from the $750m+ guidance at the beginning of the year. The actual result seems to be a $3billion deficit!!
- Where are the 2008 year end accounts? Some serious, industrial strength whitewash is necessary to cover up the various sins ... not possible with a knowledgeable Administrator in charge
- There is enough muck to believe that there is abundant scope for class actions. This could cost the bankers multiple $100millions ...
- The Banking Consortium still has about $9billion exposed to impairment. Lets say the interest payments stop ... lets say that the value of the loans is marked down due to administration events across the BBIPL empire ... how much would this directly cost the banks?
I believe that the BBSN holders should be demanding:
- repayment of 100% face value plus interest
I believe that "negotiating down" from this position does NOT mean abandoning interest nor only taking a percentage of face. I would suggest that given the power of the noteholder position (and the likelyhood that this power will INCREASE once the plans for BBL liquidation are presented) that:
- the Banking Consortium needs to act now to secure a deal - some kind of partial equity restructure could be set as the agenda ONLY IF the bankers gain the support of the BBSN noteholder power blocks.
The only acceptable deal would be a partial cash payback of the noteholder face and the rest converting to some kind of equity position - whereby the BBIPL corporate debt is converted to equity, along with the remnant of BBSN holder capital.
I am not simply "talking tough" - I am following up with actions. The Administrator cannot take a restructuring deal to the Banking Consortium - that is the role of the Trustee. Only the Creditors Committee can advise the Trustee ... and that is path I intend to take.
BNB Price at posting:
32.5¢ Sentiment: Hold Disclosure: Held
