Comments from persistentone,All-in-all, that is the most fair...

Comments from persistentone,

All-in-all, that is the most fair recapitalization of a near-bankrupt company I have ever seen. Some things stand out for me as evidence that this agreement was more than fair:

1) The BBI are diluted to nothing (as I predicted they would be), but they were then generous enough to make a special one-time payment to shareholders of 4 cents to avoid the appearance of a total wipeout. They didn't need to do that, and the fact they did this shows good faith behaviour that frankly is exceptionally rare in these kinds of situations.

And now we all understand why the BBI shares refused to fall under 5 cents. There was apparently massive insider trading on this very unusual deal point. No one could have reasonably predicted this one time payout. And mathematically you had to come to the conclusion that BBI would be completely wiped out, as in fact they were. The trading to hold BBI price artificially high had to come from someone trading on insider knowledge of the one time payout.

2) The BEPPA payout includes paying off back-interest. That's remarkable by itself and also shows very good faith in dealing with the BEPPA.

3) The BEPPA conversion was exceedingly generous.

4) BAM showed considerable generosity in not taking control of the company. It's ordinary in these kind of vulture deals for the acquirer to take 51%+, which would have greatly increased the dilution.

The fact that BAM doesn't take control also tends to indicate that BBI will not get stripped of assets.

I'm surprised at the outcome. It certainly isn't the deal I would expect based on experience with these situations, and it certainly isn't the deal described in the early afr article (maybe that article was a deliberate leak by someone to push shares down low?).