re: worth keeping a eye on, page-8

re: worth keeping a eye on Hi PCockley - my view is similar to yours. However I think that realism of their gearing position, and the general state of debt markets, will dictate further asset sales. The board has indicated they wish to reduce the gearing level and thus will do so by selling incomplete projects Kwinana and Neerabup, as this will not only repay the construction debt but will also remove need to borrow more funds to complete construction. Yes agree that these would be good assets to own in a booming WA economy, but this too should ensure that they get good prices for these assets. The net cashflow to BBP post debt servicing will not be affected should they sell these assets at an 11.4 times multiple of forecast EBITDA. I think that they may do better than that and thus it may in fact improve the $100m EBITDA surplus you have calculated. This coupled with the financial deleveraging will make BBP more attractive and should increase its SP. Heavens forbid may even look at recommencing Divis. however my real gut feel on this is that it is game over for BBP, as it is highly likely to be subject to either a takeover or a total sale of assets. Given that BNB have a lot of money tied up on this, both in equity and debt, and that they have already agreed to forgo the 2009 Base fee, I suspect that we will all be taken out of our misery at levels well above today's share price. We may look back on this in the not too distant future and say "why didn't we see and act on this opportunity - could of would of should of"