Breitburn Energy Partners LP fka BBEPQ

[Imagineer66]

I know some are following UPLMQ as a possible example of how BBEP may turn out. Sorry for the cross-post, here is some analysis I did on UPLMQ's plan that was just approved by the judge.

Again, I know the rules of staying on topic but I think this is on topic because it is an example of what may happen with BBEPQ.

Please note a couple things:
UPLMQ will exit with about $2.5B in reissued debt.
The Judge set the value of UPLMQ to be $6billion.

Re:UPLMQ Something doesn't seem right.
Is the $13.85/14.65 the "rights offering" price or the initial listing price of the newco?

I don't have time to read the WHOLE plan but did so some digging. Here's what I know for sure.

Value of new Holdco is $6.0B per the judge's order (Docket #1328).

Quoting the plan here.
93. "HoldCo EquityHolder" means any holder of Exiting HoldCo Common Stock.
94. "HoldCo Equityholder New Common Stock Distribution" means: (1) 41.0% of the New Common Stock, subject ot dilution on account of the Management Incentive Plan, in the even that the Settlement Plan Value Equals $6 billion;"
95. "Holdco Equityholder Subscription Rights" Means: (i) in the even that the Settlement Plan Value equals $6billion, the Subscription Rights offered to Existing HoldCo Common Stock to participate in the Rights Offering for 5.7% of the New Common Stock, inclusive of New Common Stock issued on account of the Commitment Premium and subject to dilution on account of the MIP.
96. "HoldCo Equity Rights Offering Shares" means 25% of the Rights Offering Shares.

4.17 Management Incentive Plan
The Plan provides for the establishment of the MIP under which 7.5% of the fully-diluted, fully-distributed shares of HoldCo will be reserved for issuance to management.


So ...
Either (if MIP dilution is after share price is calculated)
$6B*41% = $2.46B to the existing equity holders.
$2.4B/153.42M existing shares = $16.034 per share.

or,

(MIP dilution is deducted from item 94 above)
$6B*(41%-7.5%)/153.24M existing shares = $13.10 per share.
Please note that this assume all dilution is immediate and at the entire expense of the existing equity, neither of which may be true as the MIP vests 1/3 of the grants at different intervals.

So, the value per share of the existing common is somewhere between $13.10 and $16.60. This assumes that all of the Rights Offering are sold to raise the needed capital to pay certain debts. I suspect that if there is not enough capital raised by the sale of the RO then the issue price will reflect that.

But wait! There's more if you buy NOW, we'll through in an extra set of ginsu knives er, common shares.

The $13.85 is the price of new shares if you want to buy more shares before they hit the market. They haven't exactly said what the new issue price will be but I'm guessing it's got to be very close to that $16.