my bbi valuation / dbct sale flows, page-124

Rice070

"Blah, I was replying to "BBI shares can never get to 50 cents if the BEPPA's situation stays as it is". In my opinion, that is wrong. It is a, to me, clear downramp. "Never" is a long time. How is it fair to say "never". Imho, his statement is said like it is a fact. This is not a fact. It is an opinion. Stated as fact. As such, I have every right to strongly criticise his statement. That is all"

Rice, just lighten up there a touch chief. Not sure why I would want to downramp BBI, but there you go. I have always tried hard to get posters to consider the complex inter-relationship between the four different types of BBi securites, namely BBI, BEPPA, BBNO10 and BBN020. You need to try and understand this a little better. I will bow and change my 'never' to 'very unlikely' if it makes you more amenable to the logic, as follows:

The relationship between BBI and BEPPA is such that they act in a death spiral manner upon each other and that if BBI's finances stay anywhere near where they currently are, then a dilution is inevitable as they will not have the cash to defeat conversion and therefore the share price and prefs price will continue to act as a drag upon each other.

The price of both BBI and BEPPA cannot rise up if BBI stays in a difficult trading position and it is imperative for them to show to the market that they can raise the $700M + accrued interest they need to get out of the BEPPA situation. For BEPPA's to trade at 50 cents, BBI would have to have made a very significant recovery in its fortunes. And right now, despite promising noises from the potential sale of DBCT (countered by some not so good news from Ports assets and West Rail), they do have a long way to go to show the market that.

This is why I lean towards some sort of restructuring eventually surfacing that will put the BEPPA and BBI holders on the same footing and remove a lot of the dilution threat from the BBI's, effectively reversing in part the death spiral. The carnage in terms of asset sales that would be required I think would be detrimental to the long term health of the company.

I hope this helps. You do seem to be making a genuine effort as a poster. Keep it up.