A little surprising and somewhat disappointing to see all that press (following the first administrators meeting)...and no mention of the 20% PA fee, over and above the actual loan repayments.... (that banks will charge the company.)
The 20% PA fee kills of any possibility whatsoever of a return to stakeholders...regardless of the sale price for the assets.
Look I don't believe those marks of some 40% less than the June 2008 result, need to be taken at all....simply a case of managerment giving up on our company. In an ASX disclosure, we were advised that as at Sept 2008, company was not in breach of bank covenents.....yet 3 months later, noteholders investment of $600 million,PLUS or 20% of all the corporate debt was lost.
Even if those marks had to be taken however...(which mgment say are dire) ...what normally would happen is for the company to be placed into administration, and the true test of the mark to market write downs tested in the sale process by the administration. Its fair and offers clarity to all stakeholders this way.
But not with this situation.
Shareholders should have been given a vote on such a major capital restructure...should they have chosen so - the company could have been placed into administration, by the people who own it. Now the situation thrust onto on to non-bank stakeholders is this asset selloff....with 20%PA being hived off to the banks, who will have first chance of getting their loans paid back anyway.
It is really is outrageous situation. In my view a poor enditement on regulators and management who let this situation occur.
Management had a choise here....they could have allowed a shareholder vote - or at the very least - instead of this regular, meaningless pleas of..."we are sorry" - they could have resigned.
BNB
babcock & brown limited
