RE:Re: All those new BT contracts: Some perspective please.....Latest figment of my ....... from my >>>>>>
I agree (...) that offloading BT to Alstom was the right decision. For example, a simple financial analysis shows that BBD's share of Alstom's projected EBIT - if it retains the 10.5-13.5M and buys back CDPQ's stake in BT - is more or less equivalent to BBD's share (67%?) of BT's historical EBIT, PLUS of course they will be receiving over $3B cash from Alstom...
the 2nd question is it beneficial to own more of Alstom than the 10.5-13.5M anticipated. I think it is. There is upside from those shares, can borrow against the shares at very low rates, there would be a dividend from Alstom to apply against debt interest costs, can always sell the shares to reduce debt if necessary, its a green business and maintaining diversified capital should be positively viewed. The equity at 45 Euro Alstom share price would be around USD$1B.
The 3rd question is, what kind of deal can they make or did they make with CDPQ. BBDs cards are a) they may still have the right to buy back CDPQ's stake in BT and b) there could be good upside on BBD shares when and if they issue them.
Because the consolidation of A and B shares, raising capital by issueing A shares, buying back some B shares, converting the rest to A shares and in the process reducing the share count, would seem to be the most bang for the buck share price wise IMO.
We shall see soon enough.
GLTA.