Seems likely that the BEPPA/SPARCS will get a conversion multiple that gives them a slice of the NAV pie that provides for full recovery of face value.
Full conversion of the BEPPA/SPARCS and contribution of $600m from the csi results in equity of $2181m. After converting BEPPA/SPARCS at a rate sufficient for them to recover their face value there is $1317m to be shared between the new cornerstone investor and the current stockholders (non BEPPA/SPARCS).
The csi appears to be getting some good deals at the asset level so it is not clear that the deal needs to be greatly generous at the BBI equity level.
But if csi is given $1000m of the NAV (for his $600m injection) that leaves $317m for the common stock. This is 12 cents per share.
Deal is good for all:
CSI - $400m upside on a $600m equity injection plus cheap asset aquisitions
BEPPA/SPARCS - full face value of their securities
Ordinary shareholders - Limit on BEPPA/SPARC/CSI dilution and NAV above current trading price
Banks - asset sales and parent level injections pay down debt - reducing bad debt risk.
BBI Price at posting:
5.3¢ Sentiment: None Disclosure: Not Held
