Given that Alinta and BBP are one and the same entity, insofar that in Jan 2010 there was a name change from B&B Power to Alinta, then the so-called fuss about a loan receivable is an internal matter, not much more
On this: " There is a big difference between -lack of solvency (unable to pay bills)and not to expect full recovery of oustanding loan)No one - not even the banks have called Alinta insolvent. ""
Insolvent is when you cannot pay your bills, yet the big attraction with Alinta is they have a substantial capacity to pay, and that capacity is growing significantly, if one takes heed of the common price rises in power delivery these days. Thus the attraction for their income producing assets.
However, they do have another large asset which will only come into play for valuation purposes in the case of a buyout. 850,000 customers, each averaged priced at $700, or thereabouts. Say more than $400m
Alinta are asset rich, have substantial income, but their trouble is they carry a lot of debt. Ergo, they make a good target for a cashed up raider.
In the best traditions of Ron Brierley, the Guiness Peat Group are there for good reason. Indeed, with their behind the scenes leverage I will bet their board are chucking on this one.
AEJ Price at posting:
5.8¢ Sentiment: Hold Disclosure: Held
