>However I think the most likely (by far) scenario, given the facts, is that it wont.
Think of the BNB situation from a banker's perspective.
They want their loans back, interest paid in full, on time. They do not want to own the company.
The fact is ... they trust the current management. (If they did not, they certainly would not be there).
Further, the bank regard the current strategy of paring down the business to infrastructure development and operation as viable. (If they did not, they would not be advancing new money; there would not be talk of a debt to equity deal).
The company will not be in some alternative form of administration. This simply does not make sense. You cannot tune the equity level to "zombie-like living dead" levels, without incurring a huge risk of company failure. The directors would not sign up for this - their personal liabilities are also on the line.
Accept the facts ... when BNB came back from suspension, announcing the debt to equity plan and the timetable ... that was the point to have confidence that the company was not dead.
There are certainly many risks, but holders should be confident that when they read the recapitalisation proposal, that there will be something for everyone.
I am certainly expecting a number of hard years ahead. I am expecting a slow rebuilding. However, I am expecting a significant restoration of value over this time period.
I am actually happy to have a BNBG position. There is a good chance that I would have done better to buy when the deal is announced (I would certainly have the option to avoid significant pain, should the deal turn out to be bad for holders) - however, there is also a chance that the market might value the BNBG capital at more than 5cents on the dollar.
To make the case that BNB is dead is more difficult than to make the case that it will continue to trade.
It is possible to make the case that existing stakeholders will not participate in the revival of BNB. However, even here, existing holders are not without resources. I am not sure that the banks want to own an infrastructure company with the former retail holders engaged in class actions and legal sniping.
BNB
babcock & brown limited
