Major holders can still accept TO through Facility?, page-4

This is Morningstar's valuation (available to anyone who uses Etrade). Then tend to be on the conservative side in their valuations and it was obviously written before the current PNG development. What worries me is that the Immigration contracts account for half of their income and even though they will be compensated for the loss of these contracts, we don't know for how much and how long that will drag on:

We are downgrading our fair value estimate for Broadspectrum by 20% to AUD 1.10 per share, given a one-third chance of nonrenewal of the Nauru and Manus facilities contract with the Department of Immigration and Border Protection. Furthermore, we are increasing our fair value uncertainty to very high. At 2.6 times, Broadspectrum has one of the highest lease-adjusted net debt/EBITDA ratios amongst the services companies we cover, and we think raising the risk rating is prudent. The vagaries of the industry generally dictate conservative gearing for better-run operators. Our base-case fair value estimate assumes that debt can be serviced, but also anticipates that Broadspectrum's highest-margin defence, social, and property, or DS&P, segment can continue to deliver. The risk that it won't is the key driver of the downgrade of our fair value estimate. Broadspectrum reports that it has lost its preferred-tenderer status for Nauru and Manus. A new five-year contract is to be awarded by the end of 2016, but the company will compete against at least one other party. This contract accounts for around half of current earnings. Broadspectrum reported better-than-expected first-half fiscal 2016 underlying earnings of AUD 27.9 million. Given this, along with increased underlying EBITDA guidance of AUD 280 million-AUD 300 million, we increase our fiscal 2016 underlying earnings forecast by 20% to AUD 88 million, or AUD 0.17 per share. This assumes that the company achieves the lower end of EBITDA guidance, as the resources business is likely to continue to struggle and we don't anticipate any major or rapid bounce back in earnings in the next two years. Furthermore, the improved profit result comes via substantial cost savings, not via revenue growth, and cost-cutting can only go so far. We are maintaining our no-moat rating. The chequered track record and strong customer bargaining power work against the establishment of a sustainable competitive advantage.