not great but could been a whole lot worse

Well they got a haircut from QIC, but I suspect if the sale had not gone through, it would have been a big problem for BBI. Still, it is going through now and anyone with BBI exposure with be breathing a sigh of relief as the last few days have been pretty sweaty. It does look like all of BBI's short term commitments (some of which were overdue or falling due) will now all be squared off.

I agree that the 200bps increase will be offset by large decreases in base rates recently, so in the short term at least this is cash neutral, but over the medium term if interest rates start to return back to normal levels again, you would be really wanting to pay down as much debt as you can.

The application of the "sweep' facility to the corporate debt is interesting. That will really focus the BBI mgmt into paying down as much debt as possible. Just exactly how much this is I am not sure, but hopefully we can extract this number from the results tomorrow.

An important hurdle to cross for the ordinary shareholders is coming up in November with the rollover of the NZ listed Sparcs bonds, totally NZ$146M. Under the terms of these bonds a rollover request goes out in April. Bondholders can ask for half of these bonds to be either redeemed into cash or turned into ordinary shares at the current ordinary share price if they do not want to rollover 100% of these bonds (depending of course on what the new terms are they are offering). This is NZ$73M BBI may need to find to defeat this conversion as you most certainly would not want conversion into ords at the current share price. NZ$75M = A$60M and at (say) a 10 cent share price that equals another 600M shares on issue and I am sure the company does not want that at all. If a decent sized asset sale goes ahead, and all corporate debt needs are met with the initial proceeds of the sale, you would imagine BBI would want to pay down the Sparcs bonds if called upon to do so.

However, I would not put too much hope on selling anything in Europe for any sort of decent price for the foreseeable future because the financial situation in Europe is getting worse by the day. Realistically, the only asset that I think has any chance of achieving a reasonable sale anytime soon is DBCT. Let's hope something happens on that front.

Either way, you can be certain that you will not get any BEPPA interest anytime soon, maybe for several years, nor any ordinary dividends at all either, unless something really significant changes (say 100% sale of DBCT and a huge restructure of the BS leading from a sale like this). If they were to sell 100% of DBCT for a half decent price, I reckon the debt equity levels of this company will be sufficiently balanced for them to simply trade their way out of trouble over several years and everything will gradually recover.

Let's hope so anyway, but there is a long way to go.