BBI - Babcock & Brown Infrastructure

fuzzie · 26 March 2009

There is no meeting mentioned in the release. (I don't hold SPARCS and haven't read the Trust Deed). dates listed are:

Timetable 2009

26 March - (5pm NZ time) last date that Conversion Requests can be received
On or about 27 March - BBI announces the number of Conversion Requests received
20 April – Commencement of VWAP period for 17 May 2009 conversion
17 May - Conversion date for those that elect to convert 50% of holding

(edit) Oops I just read to the end of that notice. Strike out this comment

Viva_Las_Vegas · 26 March 2009

VIVA LAS VEGAS........ ASX MATH 101 - EPIC FAIL!!!

Thanks for setting me straight Banksa. I hope they get a good price for DBCT, we would all be cheering then. I hope the market gets some stability back soon.

If the SPARKS holders convert to BBI do you see BBI SP taking a negative hit?

eMark · 26 March 2009

alphaman said:
That's a summary of what I've read of the holders. I mean, holders are saying BBI has great assets, great cash flows, paying off debts is just a matter of time. The sellers have been selling simply out of ignorance, panic or fear. IF true, and therefore BBI does survive, BEPPA has to rise towards face value. In fact it may even trade above 100 because its interest rate has been reset higher hasn't it? So it's easily at least a ten bagger.

Alphaman

What I am asking is, are you a holder?

From what you are writing, you are commentating on other holders.

Disclaimer I hold BBI only.

onshow · 26 March 2009

banska bystrica said:
Viva,
1000% profit for BEPPA from today's price of 8c is 88c. Now the redemption price in 2012 is $1.00 + accrued interest. So I would say so long as BBI survive, a 1000% increase on the BEPPA price is actually a bit conservative.

Regarding BBI: If they are corporate debt free within 12 months, the stock will be around 40c+ in 12 months time. 65c/70c in 3 years time is not unrealistic. There's your 1000%.

hi there banska bystrica you seem to know a fair bit about this share so i just got a couple of questions as a bbi share holder.
How much cash in bank does bbi have?
How much debt do they have?
how much annual cash flow do they have?
what is the total value on all there assists?
Sorry for the questions but if you know that would be great to me and other readers. As i said in an earlier post i bought in today at .08c and fairly big amount and am one who is going to sit on them for a while 1-2 years and hopefully reap the rewards! Do you know how much sort term debt they have and is so will the sale of the DBCT cover that? thanks for your help in advance!

Viva_Las_Vegas · 26 March 2009

OnShow

look back a couple of days in posts Banksa put up some numbers. Very informative. I too plan to hold. One thing that spooks me is the cheap price of BEEPA which I own. It makes me think people don't have much confidence in the BEPPA debt being paid, hence dare I say no faith in the future of bbi???

onshow · 26 March 2009

Viva_Las_Vegas said:
OnShow

look back a couple of days in posts Banksa put up some numbers. Very informative. I too plan to hold. One thing that spooks me is the cheap price of BEEPA which I own. It makes me think people don't have much confidence in the BEPPA debt being paid, hence dare I say no faith in the future of bbi???

ok thanks for that viva ill look at his past posts! As for bbi from what i have researched they have some very good profitable assests around the world and they can only benifit from the recovery of the finacial crisis.

alphaman · 26 March 2009

eMark said:
Alphaman
What I am asking is, are you a holder?

No. Why?

*I think a simple question like this should not require 100 characters..................*

investorpaul · 26 March 2009

Viva_Las_Vegas said:
OnShow

look back a couple of days in posts Banksa put up some numbers. Very informative. I too plan to hold. One thing that spooks me is the cheap price of BEEPA which I own. It makes me think people don't have much confidence in the BEPPA debt being paid, hence dare I say no faith in the future of bbi???

The question is really is it being priced at a couple of cents out of ignorance??? Obviously a number of us on here think the answer to that is yes and as Banksia pointed out a few days ago, the code BBI keeps getting associated with Babcock and Brown International. The average investor/trader/mum and dad or whoever hear the words babcock and brown or BBI and they decide to run.

Obviously with any trade there is a risk or failure and sure the company could fail due to unforeseen events (eg failure to sell assets, unable to refinance or whatever) but with the potential to gains that could be made being x10 or x20 (as per previous quotes by other posters) the gains outweigh the potential losses by such a large degree that its a trade I decided to make, along with alot of others.

Now we wait and see

eMark · 26 March 2009

alphaman said:
No. Why?

*I think a simple question like this should not require 100 characters..................*

It's just that you sound so convinced by what other posters have said (I'm remembering though that you are merely reporting what others have said); when read quickly, it sounds like it's coming from you.

Are you convinced? Why are you not a holder? Or do you prefer to be a bystander?

hardyakka · 26 March 2009

Folks,

Don't you think that there is a little of "counting your chickens before they hatch?" I would hate to see people either disappointed or start to ride the highs and lows of the daily share price.

I have been buying BEPPA since November and have paid prices ranging from 4 to 12 cents. I try and adopt the view that monies paid out have already been lost and hence written off. The result of this is that anything above zero is good news and makes you smile.

Over the next few years I am of the view BEPPA can easily be in the 75 cents plus range, subject to asset sales etc. So that amount is above zero, yet I will have a bigger smile.

Be patient before counting any chickens.

Cheers

Tysonboss1 · 26 March 2009

Viva_Las_Vegas said:
I think a 1000% return in 2 to 3 years is a bit optimistic considering BBI was only at $1.50max or something like that. I think you need to back off the throttle there Han Solo.

Beppa is 8c if it makes it to 80c thats a 1000% return, I didn't say 1000X return, for a 100% return it only has to go to 16c.

with beppa having a good chance of being worth $1.20 1000% return is not unlikly.

Tysonboss1 · 26 March 2009

Viva_Las_Vegas said:
My concern is, with all the money printing going on and crazy inflation being a possibility wouldn't that technically devalue our shares should they reach the high milestones we expect, essentially reducing REAL gains?

Inflation increases prices, so values of every thing from property to shares to bread and milk all eventually follow inflation.

in high inflation times it is actually better holding assets than cash. for example some of BBI's revenues would be linked to inflation, meaning regulations would allow price increases with inflation, so their revenues would be increasing, while the debt they owe the banks would stay the same and the higher revenues would make repaying the loan easier.

It actually makes sense to have debt during high inflation times.

to use a real world example, their was a country in eastern europe that at one stage had a daily inflation rate of 36%, meaning what you could buy for $1 on 1st of jan cost $1 billion by the 1st of may, so if in those three months you had tried to save so would have gone broke, however owning an asset would have protected you from inflation, any asset even a loaf of bread stored in your freezer would have held it's value better than cash.

hardyakka · 26 March 2009

Folks,

I want to have a whinge, so please be aware of that.

Banksia provides the forum with informed and analytical views on BBI and I for one along with many others appreciate these.

But we must never lose sight of the fact that the investor alone is totally and utterly responsible for considering any posts and completing whatever research considered necessary in making an investment decision. The buck stops with the investor and no one else.

The information flow should be a two way street so we should try and provide input so Banksia gets as much out of the forum as he puts in.

Now I have had my whinge, so I am going to take cover.

Cheers

"The KFC will go into the death spiral without the 11 secret ingredients"

bellenuit · 26 March 2009

Tysonboss1 said:
Beppa is 8c if it makes it to 80c thats a 1000% return, ........

I don't want to be pedantic, but that is 900% return, not 1000%. Just as making it to 16 cents is a return of 8 cents on your 8 cents, thus 100%, making it to 80 cents is a 72 cents return on your 8 cents, thus 900%.

banska bystrica · 26 March 2009

hardyakka said:
Folks,

Don't you think that there is a little of "counting your chickens before they hatch?" I would hate to see people either disappointed or start to ride the highs and lows of the daily share price.

I have been buying BEPPA since November and have paid prices ranging from 4 to 12 cents. I try and adopt the view that monies paid out have already been lost and hence written off. The result of this is that anything above zero is good news and makes you smile.

Over the next few years I am of the view BEPPA can easily be in the 75 cents plus range, subject to asset sales etc. So that amount is above zero, yet I will have a bigger smile.

Be patient before counting any chickens.

Cheers

Great post hardyakka. Whilst those of us who have done the hundreds of hours of research can be confident, there are still significant risks with owning BBI/BEPPA.
They have a mountain of debt including $1.4Bn of corporate debt (the type of debt that can kill a company).
Their ICR coverage is tight.
Their cash situation is tight.
They are dependent on the continued support of their bankers.

Having said all that, I think they are a bargain, especially the slightly less riskier BEPPA.

random · 26 March 2009

I very much enjoy reading the comments of everyone who posts on this forum.
We all have learn't a great deal and voiced our own concerns.
In recent times however many issues and questions have been recycled more than once.
For some of the newer members can i suggest that you go back more than just a couple of pages and read the earlier posts. There is a great deal of information there to be learnt and it is well worth the effort.

Cheers.

hardyakka · 26 March 2009

banska bystrica said:
Great post hardyakka. Whilst those of us who have done the hundreds of hours of research can be confident, there are still significant risks with owning BBI/BEPPA.
They have a mountain of debt including $1.4Bn of corporate debt (the type of debt that can kill a company).
Their ICR coverage is tight.
Their cash situation is tight.
They are dependent on the continued support of their bankers.

Having said all that, I think they are a bargain, especially the slightly less riskier BEPPA.

Spot on BB, there are still significant risks, and BBI is taking slow but steady steps to address these. Yet each one of these brings a flurry of activity and speculation regarding price etc, this is unnecessary.

The two things that really only interest me in the next 3 months are a) management agreement and b) DBCT and PD sale (final not speculation). Those will go a long way to addressing the corporate debt issue and if the price moves upward I will be happy.

But then, I would rather the price fall back because a DB is selling down so I can acquire many more cheaply.

Cheers

alphaman · 26 March 2009

eMark said:
Are you convinced? Why are you not a holder? Or do you prefer to be a bystander?

If BBI survives, the size of BEPPA's payoff is very big. At least a ten bagger as I said. It does not require convincing, if you understood how hybrids work you would know.

But I'm not convinced BBI will survive. I think the probability is too small to justify a normal sized position. That's why I'm just watching. The experience you get from watching in real-time how distressed companies evolve is very valuable. You get to understand why there were still people buying into bankrupt companies right until the last day (not saying BBI will fail; talking about AFG and others). And it helps explain why price trends occur.

Malindidzumu · 27 March 2009

But I'm not convinced BBI will survive. I think the probability is too small to justify a normal sized position. That's why I'm just watching. The experience you get from watching in real-time how distressed companies evolve is very valuable. You get to understand why there were still people buying into bankrupt companies right until the last day (not saying BBI will fail; talking about AFG and others). And it helps explain why price trends occur.

What will it take to convince you that BBI will survive, or have you already made up your mind irrespective of whatever happens or doesn't happen in the future? What is your definition of a 'normal sized' holding? Surely such a thing is in the eye of the beholder and everyone would have a different interpretation of what does or does not constitute a "normal" holding. Also, by introducing the term "bankrupt" into your post you are at least insinuating if not outrightly suggesting that BBI is bankrupt or at least as good as bankrupt. Where is the evidence of this "bankruptcy" that has led you to such a conclusion? It is fine to speculate but when you pass things off as fact you need to back them up with evidence to support your argument.

Malindidzumu · 27 March 2009

Sorry, the second half of the previous post was cut off and I had to re-type
it and send it separately.

not saying BBI will fail

It sure reads like you are, but maybe I just misinterpreted what you wanted to say. I am sure you will let me know when you read this.

In any case I would be interested to know why you remain unconvinced about BBI's future and why you don't think a normal holding (depending on your definition of what a normal holding is) in BBI is justified. Is it just a gut feeling, are you risk averse, or is there some other factor or factors involved in your reasoning? It would be appreciated if you could share your thoughts in a little more detail.

BBI - Babcock & Brown Infrastructure

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