I just realised how long the post becomes with the anncmt...

I just realised how long the post becomes with the anncmt included, so here it is with the commentary only...


Feb 2010 is d day. Banks have told us they are not rolling over. No mention of PD Ports debt.


No-one is prepared to buy DBCT for a reasonable price. Bids received to date do not get us out of the crap. They only prolong the sale process for other assets and if we keep at it we will eventually wipe out SHF in try to meet the debt repayments. This approach effectively destroys the company.


Plan C (or D or E) is to get g0osed by a new investor coming in. We have exhausted all other options (apart from administration), so therefore we have to this.


I really struggle to see how the banks would not want this, depending of course on what it all means. It will come down to how much of the $1.2B is the cornerstone investor prepared to give the banks now. Naturally the banks will joust around a little and use the time zones and large number of banks to make BBI sweat it out a little, but really they would be bonkers to turn down hard cash now. I reckon $7-800M or so may see the sweep removed and the banks agree to a different repayment structure. Anything agreed with the banking group includes the BBN020 bondholders. If a large chunk of money does come, could be another big onmarket buyback. Also a partial sale of 49% of DBCT would see more debt paid off through the sweep process. Ultimately the medium term aim must be to eliminate corporate debt altogether. It is obvious now in these sorts of companies that debt should really only be at an asset level.


As the more astute posters pointed out, stand by for major pillaging of ords and prefs holders. Wave bye bye to any accrued interest. This was the 'restructure or die' approach I suggested a few days ago that was likely to emerge, and it has. I can see pref holders having to take a fixed swap of ords, maybe 4:1 or 5:1. I personally think the rights issue will come at around 5 cents, and with the enlarged share base would need to be a 3:1 or 4:1 at 5 cents to raise the $1B we are talking about. It will be non-renouncable so that everyone who wants out simply cops a straight dilution.

Whether they simply allow the SPARCS holder to convert on Nov 17 at face remains to be seen, but it looks like they definitely want them to all convert and not rollover at all, effectively eliminating the SPARCS altogether. I suspect they may get a higher ratio that the pref holders to keep them on side. Maybe 7-10:1. Who knows really.

ASX have told them to get on with it.

Cornerstone investor has exclusivity. This tells me that they definitely want the recap to proceed. As far as I am concerned only a blocking of the deal from an outside party (a failed prefs or SPARCS vote or bank refusal) can stop this from happening now.

Interesting day. Very interesting.