>If any sort of deal goes ahead, I cannot see a lot of downside in the prefs and in fact they may lead to some considerable profits via a rights issue
I'm not sure I see less risk in the Prefs.
Fact of the matter is that the Prefs are a forced convert into stapled. I expect that the restructure proposals will do the following:
- force conversion, to equity, of all subordinated debt - introduce the next generation of equity as either a new generation of prefs or as a completely separate equity structure over a percentage of the assets.
The variable conversion terms of the EPS and its status as subordinated debt, if not converted, mean that they must be converted before the restructure.
Further, I believe that management have caught the BNB "disease". This is a weird version of the "Stockholm Syndrom" - they have completely abandoned the interests of their shareholders and debtors subordinated to the secured bank loans. They only stakeholders of importance are the Banks and Senior Management.
The question should be asked; "When was the BumbleBee proposal put to the Board?". Further: "What was the initial Board response to the approach?"
The answer to these questions reveals the essence of why I am no longer a BEPPA holder.
A rational justification to hold the BBI stapled evaporated a very long time ago.
BBI Price at posting:
5.3¢ Sentiment: Sell Disclosure: Not Held
