eMark. I think one more decent asset sale for BBI and ongoing no dividends and no bonuses will be enough to get them through.
If they clear away the corporate debt facility to NIL (which will take a while), then the remaining assets and the returns on those assets should pay the interest on the debt attached to those assets. Any residue would be either to reduce debt further or in time pay a dividend, or even better try to eliminate the BEPPA issue or repay some bonds, bearing in mind bondholders will have priority.
I personally think the corporate debt facility was in effect used to ramp up size of dividends when really they are stretching themselves too far. This seems to have been prevalent across all the BNB companies. Now the banks have put a stop to this.
I personally think BBI has a much better chance of surivival than BNB because the BBI situation is much simpler and easier to manage. The BBI gearing at now 615 is much less than the BNB gearing. I am currently exposed to BNB bonds, but I would prefer to be in the BBI bonds as they are less subordinated and rank higher up the chain. The big threat to the bondholders, the BEPPA holders and the shareholders is the corporate debt facility. This facility must be eliminated and you need to go without dividends on the ords and major cost savings to achieve this.
There is still a lot of water to go under the bridge yet, but BNB and co are at least doing their best to restructure.
BBI Price at posting:
5.3¢ Sentiment: None Disclosure: Not Held
