melua's friday musings, page-3

ppup,
It all depends on what management do with BEPPA. They now have the mechanism in place for maintaining the status quo until 2012 if they want to but in order to raise fresh capital, it is my belief they need to convert BEPPA into equity (BBI). Management may think they can just let BEPPA sail on until 2012 and still be able to do a cap raising without dealing with BEPPA. There are some smart outside the square thinkers at Macquarie and no doubt they can probably come up with a great restructure that doesn't involve touching BEPPA. We'll leave it to them.

I am now convinced they do care about dilution. Therefore, they will be trying their very best to avoid massive SPARCS dilution in November this year and BEPPA dilution in 2012. If BBI are $1 in 2012, there is no dilution to NAV. BEPPA converts one for one and $800M is reduced off the liabilities side of the balance sheet. Maybe management are thinking that can happen so leave BEPPA as is for now?