Reuters: Babcock & Brown under pressure

Taken from Reuters, 12th June 2008

So, little chance for much needed capitol for extra investment in the Eircom telecoms infrastructure then. Lets just hope the government aren’t dumb enough to go through with their proposed network swap with Eircom: Give Eircom the up to date government fibre optic WAN and in return the government gets Eircoms copper network back.

But as always, never underestimate the power of dumb people in large groups.

Blue Horseshoe

Blue Horseshoe said

I think that statement is probably a fair summary of Ireland over the last 10 years and should not be just reserved for those currently hiding in the Dail.

Thats Babcock ( parent) stock symbol BNB

Babcock offspring BCM ‘owns’ eircom.

It dropped 10% overnight , mind you the chairman , Danon, resigned yesterday.

Wonder if it is possible for the government to buy it back for a song ?

Could perhaps be the 1st time in world history where a government re-nationalises a company and pockets billions (legitimately).

That’d be great!!!

Didn’t the eircom CEO hand in his notice today?

**Once B and B and the CWU syndicates collapse , then yes.
**

Its only a matter of when for Babcock, the future of the CWU syndicate is equally grim seeing as they leveraged themselves heavily in 2006 to buy 10% of eircom .

There is no rush, believe me. Debt covenant breaches must come first followed by an orderly disposal attempt followed by a disorderly disposal .

Its only really worth about €1.5bn whereas it carries €4bn debt together with other debt carried by the CWU syndicate itself and B and B themselves . Let the CWU and the Australians take their hit first and lets not be in any rush to bail the greedy bastards out with taxpayers money .

I can see the government and ESPECIALLY the NTMA eventually going in for maybe €400m to get 25% of the business but thats next years business and there is some ways to go before we even look at that .

An interesting FT article in the spring called eircom a " zombie " .

Its republished here

nakedcapitalism.com/2008/03/ … quity.html

Crudely meaning the ‘markets’ ‘think’ eircom can service at least 70% of its €4bn debt or €2.8bn , I think its a lot less myself .

The Australian Press was FAR more direct on the survival prospects of the parent as you can see.

business.theage.com.au/babcocks- … -2pho.html

business.theage.com.au/bb-in-fre … -2pbq.html

news.smh.com.au/business/babcock … -2phi.html

I would expect the real gnashing and wailing to start in about October so!!!

I have heard that the CWU syndicate that owns the shares on behalf of the employees may have its own debt covenants cross linked to B & B , somehow .

The trade unionists are keeping resolutely schtumm about the financing with which they raised their stake in eircom from 20% to 30% in 2006 .

I note that BCM the bit of Babcock that owns eircom has reacted to the drops in BCM ( BCM only dropped by half the parents value on each of the last two days )

asx.com.au/asxpdf/20080613/p … v1dp4s.pdf

You would wonder why

As for the parent :open_mouth:
Babcock Disaster Looms

business.smh.com.au/babcock-disa … -2pzg.html