I reckon selling 49% of DBCT at a fair price and $1B extra cash...

I reckon selling 49% of DBCT at a fair price and $1B extra cash into the tin would just about see BBI right.

I think selling 49% of DBCT and then having a BEPPA restructure and a large rights issue of at least $1B on top (with a new cornerstone sh'er emerging) is what needs to happen.

Melua, I agree with your overall concept, however I suspect the number of shares you get for your BEPPA and the price used for the rights issue (underwritten by the cornerstone shareholder) cannot be the same as it is unrealistic at present to expect the price to trade anywhere near NAV and therefore the cornerstone investor could be disadvantaged as the price he pays is too high compared to what the BEPPA holders got out at. He would effectively be bailing out the BEPPA holders at $1 and that is not going to happen. They need to accept 50-60 cents of value in my opinion to make it happen.

There is a balance between getting the BEPPA sorted and bringing in a cornerstone shareholder. Even after taking into account that the BBi ord price would rise up sharply from 7 cents where it is at now, I could not see it trading to 20 cents, especially with a pending rights issue hanging over the price, therefore I cannot see the cornerstone investor paying the same price as BEPPA holders get. BEPPA holders will need to accept some loss on their face value during the conversion process to encourage the cornerstone investor to take part.

In your example you use 20 cents as a conversion price for BBI and you get 5 BBI. Again these are back of the envelope numbers, but I would suggest (just as a starting point) you would get (say) 3 BBI for your BEPPA, and then your cornerstone shareholder comes in at 20 cents and helps to raise $1B or so. It would be a pretty hefty rights issue at that price, but that is what needs to happen. This price would be the encouragement a new investor would require to become involved, and at the same time may (or may not) be enough to encourage the BEPPA holders to convert.

Whatever the figures may turn out to be (if indeed something like this happens), the price paid by the new investor and the conversion price given to BEPPA holders need to be different to make the deal happen, but still give both sides enough to make it worth their while.

Anyway, food for thought.