Babcock removed from All Ordinaries index

crawler

http://www.theaustralian.news.com.au/business/story/0,28124,25149414-36418,00.html

BABCOCK & Brown's rapid fall from grace has culminated in the former high-flying investment banking and financial services group being removed from the All Ordinaries index.

Babcock's removal from the All Ords, which is made up of the biggest 500 companies by market value, and from the S&P/ASX 100 at the same time, comes after the company's shares have fallen from a high of $34.78 in June 2007 to 32.5c when it last traded on January 12.

At its peak, Babcock was valued at more than $9 billion.

Standard & Poor's index services associate director Simon Karaban said Babcock & Brown stock had been suspended for two months and management had not shown any intention of resuming trading.

"Babcock is an illiquid, non-trading stock," Mr Karaban said.

Tom Young

There should have been some poison pill provision in the initial IPO to stop the plunder which has now gone on three times. Twice Messrs O'Reilly and Co and then Babcock.

The problem now is that the government can't afford to bailout eircom/BCM.

Facts:

1. Company leverage to the hilt;
2. Parent in violent trauma;
3. Union control will discourage any potential investors; and
4. Banks unlikely to loan given banking crisis and point 2.

Tom

bealtine

Tom Young wrote: »

There should have been some poison pill provision in the initial IPO to stop the plunder which has now gone on three times. Twice Messrs O'Reilly and Co and then Babcock.

The problem now is that the government can't afford to bailout eircom/BCM.

Facts:

1. Company leverage to the hilt;
2. Parent in violent trauma;
3. Union control will discourage any potential investors; and
4. Banks unlikely to loan given banking crisis and point 2.

Tom

It's not like that the possibility of rape and pillage wasn't pointed out at the time either. O'Rielly was supposed to be the saviour of all things Irish (according to the blinkered pundits at the time). His company ran off with a cool billion whilst delaying nearly all capex.

So do we let eircom sink?
If we do our telecommunications system goes too, what's left of it.(the last mile is in a dreadful condition)

In this one, the choices are a hobsons choice of "damned if we do and damned if we don't".
We still need a telecommunications infrastructure...
I suspect that the corporate bandits saw an opportunity that was too good to be true and took it,as would have I.They all hoped that the gov would come riding to the rescue at some stage and they could run off somewhere with their billions.

If eircom go under radical thinking will be required and that thinking should start now before the company is bled dry. In fairness BB have been trying but it's on a shoestring budget...

Thraktor

bealtine wrote: »

It's not like that the possibility of rape and pillage wasn't pointed out at the time either. O'Rielly was supposed to be the saviour of all things Irish
(according to the blinkered pundits at the time). His company ran off with a cool billion whilst delaying nearly all capex.
So do we let eircom sink?
If we do our telecommunications system goes too, what's left of it.
(the last mile is in a dreadful condition)

In this one, the choices are a hobsons choice of "damned if we do and damned if we don't".
We still need a telecommunications infrastructure...
I suspect that the corporate bandits saw an opportunity that was too good to be true and took it,as would have I.
They all hoped that the gov would come riding to the rescue at some stage and they could run off somewhere with their billions.
If eircom go under radical thinking will be required and that thinking should start now before the company is bled dry.
In fairness BB have been trying but it's on a shoestring budget...

I'd say get a plan in place to rebuild last-mile infrastructure from the ground up in an open-access fashion, so that when (not if) Eircom collapse, the industry can move on without them. Almost all of Eircom's last mile copper either already is obsolete or will be very soon, so it's going to have to replaced sooner or later. Better for the government to just do it right away in a properly open fashion than bail out Eircom, and then having to pay for the upgrades down the line anyway.

crawler

You raise a good point. It is NEVER good for an incumbent operator to fail, that said, this does highlight what can potentially happen if you dont have true platform competition available in the mass market.

We can't change the past and I don't think focusing on that is the solution.

We do have an opportunity to fix many things now using the results of the NGN consultation, fixing competition, Digital Dividend, new entrants and encouraging innovation. The challenge is going to be to get all parties, acting in good faith and with joined up thinking.

bealtine wrote: »

It's not like that the possibility of rape and pillage wasn't pointed out at the time either. O'Rielly was supposed to be the saviour of all things Irish (according to the blinkered pundits at the time). His company ran off with a cool billion whilst delaying nearly all capex.

So do we let eircom sink?
If we do our telecommunications system goes too, what's left of it.(the last mile is in a dreadful condition)

In this one, the choices are a hobsons choice of "damned if we do and damned if we don't".
We still need a telecommunications infrastructure...
I suspect that the corporate bandits saw an opportunity that was too good to be true and took it,as would have I.They all hoped that the gov would come riding to the rescue at some stage and they could run off somewhere with their billions.

If eircom go under radical thinking will be required and that thinking should start now before the company is bled dry. In fairness BB have been trying but it's on a shoestring budget...

oscarBravo

http://www.irishtimes.com/newspaper/breaking/2009/0313/breaking22.html

Sponge Bob

One wonders whether this could trigger a "Defeasance Event" of any sort on the eircom bond structure , technically the BCMIF structure not eircoms ????