Investor Relations response below. My comments after...

Investor Relations response below. My comments after that:
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Hi XXXXXX
Further to your thoughts and comments

- Over the past year BJT's cash position has been impacted by the purchase of our management rights ($20m) and the pay down of the ANZ Corporate facility (~$56m).
- The 3.3cpu mentioned in the April release was based on expected operation cash flow for FY09.
- There are a number of potential uses for the Shinjuku cash including any payment that may be associated with the ongoing negotiations with the hedging counterparty in regards to the details of the hedge (being different to the amount that the contract is in/out of the money). Other uses may include, retaining cash to maintain flexibility or may be used in regards to any developments regarding our debt profile. BJT has a tranche due for refinancing in March 2010.

Kind Regards
XXXX
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My initial reaction was that response was either vague as hell or really just chewing up my questions and spitting them back out in a paraphrased fashion.

Then on second thoughts what was I really expecting around 3 days out from annual result announcement and distribution announcement whatever that may be.

As far as BJT looking forward, the commentary above regarding the $20 million for the management rights obviously refers to what was discussed in post #: 4069134 and maxinemillion’s last comments.

I suppose whether shareholder’s got done over is up for debate but to take the positives out of it, we are free of Babcock Group and the (exorbitant) $20 million expense was a one off. So all things being equal we could expect this “type” of cash flow to figure into future distributions.

Again in relation to the above comments, the tranche of debt due for repayment (failing rollover) is 18.6 billion Yen or about $255 million AUD. Principal debt servicing covenant is 1.2X. As at 31st December 2008 debt servicing on this facility was 2.2x (from page 11 of BJT Interim Results). That is, Debt servicing is being met with a reasonably healthy “margin for error”.

Of the proceeds after say, total payment of around $40 million of out of the money hedges, from comments above my view is failing a further cash contribution to my estimate of at least 3.3 cents per share distribution for this half, BJT will only require some 215 million of debt to be rolled over in March if all of the remaining Shinjuku proceeds are used towards reducing this facility and appeasing any discomfort lenders MAY have. Not that they would.

Currently the LVR on this facility which represents 20% of BJT’s debt maturity is 39%. That means by my estimate the portfolio value securing this facility is worth approximately 47.7 billion Yen or about 654 million (10 of BJT’s 44 or 43? Properties).

If, big IF, BJT uses say $41 million from the sale of Shinjuku to reduce the leverage on this facility, then the facility LVR would be around 32.7% (ignoring asset value write downs). Notwithstanding, this will also further boost debt servicing on this facility significantly well beyond even the “margin of error” referred to above.

I am revising my view on BJT from medium term to long term. Obviously we can’t read into Investor Relations’ comments above too much, but any of the above scenarios would seem to point to sustainable and long-term capital management that adds to the security and viability of this business as a going concern.

Looking forward to Friday…..at this stage.


Cheers!!!