This is in response to what in my opinion, is a rather hopeful thread (finfam, pwu etc) - regarding the loan of $450 Million.
I am a holder of AEJ - so it is in my interest for the stock to recover!
However, sadly, I think you analysis re the $450 Million is incorrect.
The phrase you quote (which I have repeated below) is a very basic solvency disclosure. Essentially there are few obligations in BBPT so that it requires a mere trickle of residual assets from BBPL to meet these obligations. It does not mean that the full $450,000,000 is recoverable. These residual assets are held in BBPL and are remote from the claims of the banking syndicate which are secured against the assets in Alinta Finance.
The vast bulk of the assets are in the Alinta Finance group and are the only means by which the full debt owed to the Trust can ever be paid.
If you think the banks would ever agree to such a payment that would be in priority to their own claims (which they are being asked to take a haircut on) and against all the principles of seniority then you are more hopeful than me.
If shareholders are lucky, they will recover a few cents in the dollar once the recap etc is completed. However, there is not an insubstantial chance that they may get less than the current price.
This stock is a punt on the negotiating ability of management.
Good luck just my opinion but maintain realistic expectations.
_____________________________________________ "The Trusts major asset is a loan receivable from its co-stapled relative Babcock & Brown Power Limited (BBPL or the Company) of $450,000,000. BBPT is therefore reliant on the continued solvency of BBPL to enable the full loan receivable balance to be realised. The Directors have performed an assessment of the amount that BBPT would recover from BBPL in the unlikely event of BBPL being required to realise its assets in a liquidation scenario.The range of likely outcomes will be more than sufficient to realise any outstanding obligations of BBPT both at 30 June 2009 and as forecast in the foreseeable future."
AEJ Price at posting:
5.8¢ Sentiment: Hold Disclosure: Held
