# CNP - Centro Properties Group



## traderandy (23 November 2006)

Anybody have any thoughts on this stock?

They just released an ann reporting healthy retail sales growth and the sp is at an all time high...


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## ands (27 July 2007)

Now I'm wondering if anyone has any thoughts on this stock as it has be falling for the last 2 months. Is it a good time to jump on board, is it nearing its bottom? Any support? Does anyone think the can be as big as Westfield? How many shares have been issued? Thanks.


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## dlineinvestor (28 July 2007)

Centro Properties Group is a retail property investment and services organisation.

Centro has become one of Australia’s leading property owners with a portfolio valued in excess of $2.4 billion.  Ownership interest is held in 30 shopping centres across main population areas in five states; with over 2,610 specialty stores, gross lettable area of 823,433 square metres and annual sales in excess of $3.1 billion.

Retail property under management, following acquisition of the MCS Property business is nearly $5.2 billion, and with the inclusion of the recently announced acquisition in California, USA, is over 6 billion.  CT Retail has now been delisted and its properties acquired by Centro and Prime. Centro is now well established in the property syndication business, an area with assets under management of $2.1 billion and presenting great future opportunities.


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## apra143 (23 October 2007)

Is it me, or can others see the begginings of a triple bottom reversal? Support at 7.25 level seems strong. Will have to wait and see what happens when/if rally reaches near 8.25 level:


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## michael_selway (23 October 2007)

apra143 said:


> Is it me, or can others see the begginings of a triple bottom reversal? Support at 7.25 level seems strong. Will have to wait and see what happens when/if rally reaches near 8.25 level:




Hi it still may be a bit pricey atm, but a reversal looks likely even lookign at the fundamentals (EPS forecasts)

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 58.7 47.3 50.4 53.8 
DPS 39.8 47.3 50.5 54.1 *

thx

MS


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## lamot1 (17 December 2007)

Wow CNP have been hit hard by the credit crunch. They have revised FY08 profit forecasts down to 40.6c from 47c per share, based on higher borrowing costs and no new external fund inflows. They have also canceled the Dec 07 distribution and will look sell some core assets. In addition to this the company must now refinance A$1.3b worth of long term debt.

At this stage the stock is down some 70% (!) at about 1.80, compared to the most recent (06/07) book value of about 3.50. Given the size and track record of this company, does anybody think the selling has been slightly overdone by worried investors? Conversely, do you think that this may be a warning indicator of things to come for '08?


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## waz (17 December 2007)

I for one think it has been oversold. I bought in at market opening at 2.30 and was considering again a buy when it dropped below 1.60.

Besides the cancellation of the distribution and the withdrawal suspension, there is really no new news. We have known about these refinancing problems for months.

40c per share profit forcast and a share price of $1.65 is damn good.

Keep in mind that besides todays drop, it has fallen 85% since may.
According to my basic stats its market cap is only 1.3bil

Is it really worth 1/20th the value of westfields??? When it it manages of 26bil


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## wayneL (17 December 2007)

waz said:


> Besides the cancellation of the distribution and the withdrawal suspension, there is really no new news.



ROTFL!

Analogous to someone saying: Besides finding out about the liver cancer and Crohn's Syndrome, I'm in excellent health!

LOL


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## Aussie2Aussie (17 December 2007)

waz said:


> Is it really worth 1/20th the value of westfields??? When it it manages of 26bil




I think the real issue is the difference between manage and ownership, what, if they went belly up, would be left.

They can manage $52b in property, but if the bank has first dibs and they cant pay the interest then they are in deep trouble.

Saying that the forecast will drop to 40.6c from 47c means nothing as the day of truth is still far away. What is more telling is the cancellation of the Dec. 07 payment.


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## prawn_86 (17 December 2007)

I dont know a lot about debt structuring, but if they have an EPS of 40c shouldnt their SP be a conservative $4 approx?

Based on 'simple' fundamentals they look oversold to me, but i dont know much about how debt affects them...


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## Aussie2Aussie (17 December 2007)

prawn_86 said:


> I dont know a lot about debt structuring, but if they have an EPS of 40c shouldnt their SP be a conservative $4 approx?
> 
> Based on 'simple' fundamentals they look oversold to me, but i dont know much about how debt affects them...




It really does not matter, this company is in serious trouble. As I said above what they predict and what is real are the issues.

The market recognises a business that is haemorrhaging and Centro is!


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## Bushman (17 December 2007)

Hi guys;

I work at CNP/CER (and don't worry, I am not privy to market sensitive info regarding the current situation) so I do have an insight into CNP. 

The issue for CNP at the moment is if CNP can refinace the short term loan facility and at what cost to our services business (ie funds management, development fees, lease fees etc). Higher debt will eat into the margin of the services business and this is the premium the market has been discounting over the last 6 months as this was where the distribution growth was to come from. 

Centro still 'owns' a significant percentage of the underlying assets of the business and these assets (especially Aussie retail but even the smaller US retail properties) are perfoming as well as ever. Aussie cap rates are 5.75% for a regional centre. There are very many buyers looking for retail property returns and this will hold no matter what the global outlook as these returns are non discretionary (as they are anchored by long term supermakets/discount department store leases) and are much sought after by super funds. Current sell down seems to have overlooked this at the moment which is understandable given the concerns over rolling over the debt. 

Centro has been caught out with having a bullish and complicated services business model at a time when global credit markets have frozen up. Banks will not refinance at the moment unless it is at a significant permium and the New Plan bridge facility needs to be rolled over. So it is fair to say CNP is a 'victim' of poor liquidity management along with Citi Bank, ML, Deutsche, Rams, Northern Rock etc. 

No idea what will happen but the outcomes are fairly obvious as alluded to in this mornings announcement and will be known within 2 mths. It's been a tough old lesson for the senior managers over here though - from market darling to market pariah wihtin 6 months. Got to love these efficient capital markets.


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## hacheln_mice (17 December 2007)

prawn_86 said:


> Based on 'simple' fundamentals they look oversold to me, but i dont know much about how debt affects them...




Lol, you could say they were oversold before they went into trading halt too.

Ignore the fundamentals and focus on reality: its share price .


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## bigdog (17 December 2007)

http://news.theage.com.au/centro-securities-plunge-70/20071217-1hhy.html

Centro securities plunge 70%
December 17, 2007 - 2:37PM

Centro Properties Group has become the biggest local victim of the US sub-prime mortgage crisis after higher funding costs forced it to downgrade of its distribution guidance, causing its shares to plunge by more than 70 per cent.

Australia's second largest shopping centre owner has downgraded its full year distribution guidance by 14 per cent to 40.6 cents, from 47 cents.

It also announced it would not pay a distribution for the first half of the 2008 financial year as it revealed it had failed to refinance $1.3 billion of maturing debt although.

Centra has obtained an extension until February 15 to refinance the debt.

The market was already expecting bad news from Centro, which went into a trading halt last Thursday, citing the need for "revised earnings guidance.

But Monday's announcement was far worse than investors expected.

By 14332 AEDT, Centro stapled securities had fallen $4.11, or 71.93 per cent, to $1.60. They closed trading at $10.02 on May 7 and have gradually slid since then on concerns about the level of debt used to fuel the company's rapid United States expansion.

Centro told the stock exchange its 2007/08 earnings would be hurt specifically by the increased costs associated with the extension of the debt facilities until February, and the expected costs of the refinancing.

"In addition, restrictions imposed on Centro's capital expenditure under the terms of the financing extension will restrict Centro from carrying out some of its growth plans in the United States which had been expected to generate higher earnings," the firm said.

Centro has rapidly expanded in size since November 2006 with its funds under management as of June 30 at $26.6 billion, up from $11.5 billion just 12 months earlier.

In July 2006, Centro paid $US1.83 billion ($A2.1 billion) in equity for Heritage Property Investment Management. The deal came with an additional $US1.4 billion of debt.

In February, Centro and one of its listed funds, Centro Retail Trust, bought New Plan Excel Realty Trust Inc for $US5 billion ($A5.8 billion), which included a $US1.3 billion debt component.

Centro said it would consider selling Heritage and New Plan to reduce its gearing levels, which it needs to do to secure the new financing by February.

"That really is an integral part of the strategic review that the board has committed to undertake," chief executive Andrew Scott told journalists.

Centro will also consider selling some of its assets into joint ventures, and said it had already received some interest from potential investors.

"We've certainly received a number of approaches from various parties," Mr Scott said.

Centro has recently come under heavy criticism from brokers over its lack of disclosure to the market about gearing levels, particularly given the current parlous state of credit markets.

UBS Investment Research property analysts Simon Garing told AAP earlier this month that the company had a gearing level at one point as high as 70 per cent, although this was not obvious from the company's accounts.

"When you look through their accounts into sub-trusts, it is heavily geared," he said.

Centro said it hadn't warned the market of any potential trouble earlier than Monday because in August, when the sub-prime crisis started to push up borrowing costs and drain liquidity in debt markets, it believed that long-term refinancing would be available when it needed it.

"We never expected, nor could reasonably anticipate, that the sources of funding that have historically been available to us and many other companies would shut for business," chairman Brian Healey said.

Centro said that in August it completed a $US300 million, 10 year commercial mortgage-backed security issue "on reasonable terms", despite the fall-out in global credit markets.

This had given it confidence that it could wait for debt markets to settle before returning.

"Up until late last week, we were of the view that our short term debt obligations could be refinanced on a long term basis," Mr Healey said.

"While we understand the difficulty that this presents to our security holders, the underlying retail property assets and performance of the business remains strong."

Last week Centro had a market value of $4.8 billion and was worth close to $10 billion in May.

By 1433 AEDT Monday, it was worth about $1.35 billion.

Higher funding costs in short term debt markets recently brought non-bank mortgage lender RAMS Home Loans Group to the brink of collapse, and forced it to sell its franchise network at a firesale price to Westpac Banking Corporation Ltd.


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## chops_a_must (17 December 2007)

hacheln_mice said:


> Lol, you could say they were oversold before they went into trading halt too.
> 
> Ignore the fundamentals and focus on reality: its share price .




Yup. Went short this when I first heard it going to poo on here. Didn't expect it to be such a massive earner.  May well gap down tomorrow as well. Insane.


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## surfingman (17 December 2007)

chops_a_must said:


> Yup. Went short this when I first heard it going to poo on here. Didn't expect it to be such a massive earner.  May well gap down tomorrow as well. Insane.




:topic Hey Chops,

Can you short on a trading halt? or just when market reopens?

I am about to spend some more time researching CFDs and Forex, going long shares is looking far too risky for the time being....


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## Aussiejeff (17 December 2007)

wayneL said:


> ROTFL!
> 
> Analogous to someone saying: Besides finding out about the liver cancer and Crohn's Syndrome, I'm in excellent health!
> 
> LOL




It's called "Ostrich Syndrome" ....  CNP closed at $1.36 - DOWN 76% from Friday's close!

On a more serious note (can it be more serious?) I wonder how many other Aussie companies secretly "in the poo" are about to let the market know "we can't get bank finance" either?

Sigh....

AJ


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## ToddPowers (17 December 2007)

I wonder what is up with this trade?
@ 16:27:38	Price: 5.700	Volume: 132,754	 Value: 756,697.80

Seems so strange!


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## chops_a_must (17 December 2007)

surfingman said:


> :topic Hey Chops,
> 
> Can you short on a trading halt? or just when market reopens?
> 
> I am about to spend some more time researching CFDs and Forex, going long shares is looking far too risky for the time being....




I assume it's the same as any other pre-open or whatever. I'd look at other options than CFD's though.


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## skating101 (17 December 2007)

Oversold? Its still a solid earning company right? Anyone here buying it today? Im not exactly all that clued up on property trusts


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## michael_selway (17 December 2007)

skating101 said:


> Oversold? Its still a solid earning company right? Anyone here buying it today? Im not exactly all that clued up on property trusts




Hm **** this might go below $1

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 58.7 47.2 50.4 53.6 
DPS 39.8 47.3 50.4 53.9 *

thx

MS


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## hardcoremike (17 December 2007)

hi michael. excuse my ignorance cause i'm still a beginner. 
but what makes you say it will go below $1?

Thanks alot.


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## ROE (17 December 2007)

If it cant refinance its Debt in Feb it could goes belly up so it's not oversold
Centro is highly gear so most of the company asset is debt.

It could be force to fire sale if it cant refinance its debt.

I'm staying the hell away

Could be the beginning of the big snow ball for properties now that debt is no longer cheap and they cant
make enough income to cover debt repayment and or people would not lend money to anyone any more
not even to their own family


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## vishalt (17 December 2007)

So, anyone up for shorting Westfield or Stockland? A 76% gain on CNP would hit certainly hit the spot (if you were short ofcourse)


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## chops_a_must (18 December 2007)

vishalt said:


> So, anyone up for shorting Westfield or Stockland? A 76% gain on CNP would hit certainly hit the spot (if you were short ofcourse)




I am.

Just looking for some of the weaker charts. This is likely to put a down trend in the sector as a whole at the very least...


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## tronic72 (18 December 2007)

CNP could be a good opportunity for those with big ones. I don't think the Market will let it collapse because the repercussions could make today's actions seem like Christmas Day.

My 2c

PS. Mine aren't big enough for such action.


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## waz (18 December 2007)

Does anyone know of any large overseas listed REIT?

Most of the american ones are small, the rest have been taken over by Australian trusts.

From what I can see, most American REITS have only fallen by 2-4% overnight, although most have fallen in half over the year. I would have thought these trusts would have been higer overgeared compared to Australia with credit once being so cheap.

By the way, for those that say 70% gearing into property is way too much and an unwise move. What do you say about all those Australian investors who buy into property with 90% gearing? Buying a place worth 400k on an income of 50k a year.  shouldn't we more worried about that bagging out millions of aussie property investors and not just Centro????


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## hacheln_mice (18 December 2007)

waz said:


> I for one think it has been oversold. I bought in at market opening at 2.30 and was considering again a buy when it dropped below 1.60.
> 
> Besides the cancellation of the distribution and the withdrawal suspension, there is really no new news. We have known about these refinancing problems for months.
> 
> ...




When panic sets in, logic and fundamentals (along with shareholder capital) goes out the window.  It was interesting that a lot of comsec clients bought CNP hand over fist yesterday  .  I don't see the appeal of buying stocks that are in free fall unless you're an institution.  If you play with fire, then you're asking to get burned.


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## Awesomandy (18 December 2007)

hacheln_mice said:


> I don't see the appeal of buying stocks that are in free fall unless you're an institution.  If you play with fire, then you're asking to get burned.




Such as seeing it drop another 60% within 30min of the market opening. It's now at 50c. Whoops... Looks like there migh be an influx of people lined up to get refunds at the department stores this week to cover their margin loans.


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## numbercruncher (18 December 2007)

Whoa - Maybe Centros retail tennants might get to snap up their own shops freehold for less than a years rent ? 

Contagion anyone ? This is gotta spread like a nasty disease ....



New rule ?  *Question anyone dependant on Debt*


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## tronic72 (18 December 2007)

This is straight of my eTrade.

CNP: (-55.147%)

Wow. How many more billion just disappeared?

This is carnage.


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## waz (18 December 2007)

Interesting, market cap is now less than 500mil, surely if they sold absolutly everything, paid out their loans, the equity left over would be more than 500mil.


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## numbercruncher (18 December 2007)

tronic72 said:


> This is straight of my eTrade.
> 
> CNP: (-55.147%)
> 
> ...





Their market cap was reduced to like 1.5b yesterday, so they "only" lost less than a b today  Yesterday was like a 3b wipeout I thinks ?


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## chops_a_must (18 December 2007)

Why oh why did I close out my shorts EOD yesterday on this? Lol! 

If it comes back up enough, it might be worth another punt.


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## ROE (18 December 2007)

waz said:


> Interesting, market cap is now less than 500mil, surely if they sold absolutly everything, paid out their loans, the equity left over would be more than 500mil.




Not if they pay a premium for those property in most case they did
so in a fire sale you may get 30% or more less than the actual value on the book


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## trinity (18 December 2007)

Feels like a nosedive... 

Even the house made of bricks has fallen ... :bricks1:

How does a company recover from a wipe out like that?


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## Sean K (18 December 2007)

Here's a broker ahead of the curve:



> 1044 [Dow Jones] STOCK CALL: *Centro Properties (CNP.AU) and Centro Retail (CER.AU) both downgraded to Underperform by Macquarie on uncertainty surrounding debt refinancing*. Says CER's "operating earnings risk remains if the US economy deteriorates further, leading to a decline in occupancy levels." Also believes CNP will be required to sell assets at a loss, to raise cash to pay down debt and could "potentially raise equity at a deep discount." CNP down 54% at 63.5 cents; CER off 29% at 60 cents. (WEL)




Underperform? WTF!!! 

Actually, I suppose that means they underperform from this position which will be ordinary. I wonder what their recommendation was 2 days ago?


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## Sean K (18 December 2007)

Hooly dooly, something's out of whack with these numbers:



> 1117 [Dow Jones] STOCK CALL: *Citi cuts Centro Properties (CNP.AU) price target to A$2.33 from A$8.03* after CNP announced a 14% earnings downgrade for this FY. "With assumptions of a 1% margin increase in US debt and 1.2% for domestic debt in the forecast, there may be further downside," Citi says in client note. "The timing of the refinancing in February more than anything else will influence CNP's strategic review outcomes, although we expect asset sales from lower geared (35%) funds such as Centro Australia Wholesale Fund, in which CNP has a 50% interest with asset values of A$2.6 billion in the intervening period. The tightening of the liquidity in both the offshore and domestic lending markets, coupled with its overall look-through gearing, has caused CNP to be pressured by its lenders to reposition the business." Last trade down 71 cents, or 52%, at 65 cents. (ABH)



14% earnings downgrade results in a 60% ish target cut?


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## nioka (18 December 2007)

CNP have valuable assets and must now be a takeover target. I guess Westfield are sizing up the situation as will be some of the larger super funds. To cash in on this all you need to do is find the true value before the eventual offer is made. Nothing like a fire sale to bring out the bargain hunters.


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## lamot1 (18 December 2007)

nioka said:


> CNP have valuable assets and must now be a takeover target. I guess Westfield are sizing up the situation as will be some of the larger super funds. To cash in on this all you need to do is find the true value before the eventual offer is made. Nothing like a fire sale to bring out the bargain hunters.




Yeah Westfield in particular would definitely be interested I'd say. I think they would be more likely to cherry pick some of CNP's best assets at bargain basement prices rather than attempt to buy the entire company and their debt problems.

Traders seem to be having a field day - 270m traded from 850m shares on issue. There was some big profits to be made on this one in the last two days, both on the way down and back up from today's low. Then again its always easy to see the bottom in hindsight, probably takes a little more nerve to actually execute the trade while its still falling. Think of those that bought in yesterday only to see it down _another_ 50% this morning!


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## Go Nuke (18 December 2007)

Wow what a disaster!
And I thought AED was bad! LOL

Seeing the share price hit .42c today nearly made me fall over. I couldn't help myself and have taken yet another risk to buy a few CNP shares.

I'm planing for a short term hold. Hopefully the buyers will come in again soon as it seemed to get picked up pretty well from .42c.

After watching AED do the same thing recently Im planning for a rebound or an opportunistic takeover offer perhaps

How much lower could it go? (lol..famous last words eh)


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## Ashsaege (18 December 2007)

Go Nuke said:


> Wow what a disaster!
> And I thought AED was bad! LOL
> 
> Seeing the share price hit .42c today nearly made me fall over. I couldn't help myself and have taken yet another risk to buy a few CNP shares.
> ...




Welldone, CNP are back up to 85cents! I only heard about CNP on sunday when my mate was talking them up... poor fella!


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## Santoro (18 December 2007)

Just thought I would like to show the readers the major holders here....91% held by major banks with Barclays and UBS increasing and even entering in the last 2 months.

Guess who's been buying them during the slide....


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## wayneL (18 December 2007)

Santoro said:


> Just thought I would like to show the readers the major holders here....91% held by major banks with Barclays and UBS increasing and even entering in the last 2 months.
> 
> Guess who's been buying them during the slide....



... and these are the guys they call "the smart money"? 

It's the worst euphemism in the financial world IMO.


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## Go Nuke (18 December 2007)

Well back in May 2000 the share price was had some good support and resistance between $2.036 and $2.136.

I don't know if that counts for anything now considering these are completely different times.
And I dont know if this will count at all but I'll put up the chart with the fib numbers for today.
(Probably better till the sp turns around but it will do)


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## PennyHopeful (18 December 2007)

With quality underlying assets surely this is seriously oversold? Obviously its a risky stock till the dust settles but if im a bank id lend to them.. they will pay overs and have plenty to secure it!


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## numbercruncher (18 December 2007)

Santoro said:


> Just thought I would like to show the readers the major holders here....91% held by major banks with Barclays and UBS increasing and even entering in the last 2 months.
> 
> Guess who's been buying them during the slide....





wow!

And every 1pc equates to roughly 50m in losses ?  gawd if the crunch causes the big four take a few more hits like that and theyll get spanked too 

Further to that, assuming i have the numbers roughly correct, lets use CBA as example , 13pc stake = 650m loss, CBA last years profit was like 4.5b - so like equivalent of 15pc of last years profit gone in one foul swoop ?, scary stuff.


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## tronic72 (19 December 2007)

Here's something to make those suffering through the CNP collapse just a bit more pi$$ed.

"Centro loaned $44m to company execs
Font SizeecreaseIncreasePrint Pagerint
Anthony Klan | December 19, 2007

THE most senior executives at Centro Properties Group - which is facing collapse after suffering a $6 billion meltdown this week - were given 10-year interest-free loans by the company to buy $44 million worth of shares.

However, seven of the company's top executives, including Centro's chief executive, Andrew Scott, chief operating officer, Graham Terry, and chief financial officer, Romano Nenna, may never have to pay the money back because of a legal clause in the generous share agreements that says the money does not need to be repaid if the share price collapse"

How many of the members of this site get that sort of deal to help buy their shares?


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## ROE (19 December 2007)

PennyHopeful said:


> With quality underlying assets surely this is seriously oversold? Obviously its a risky stock till the dust settles but if im a bank id lend to them.. they will pay overs and have plenty to secure it!




Banks already made it clear to CNP ... we WONT lend you the money at this current leverage and if we do it going to be much tougher and higher rate.
Until Centro can start selling its shopping mall to bring equity down.. It's unlikely to secure funding.

and every man and its dog know CNP is in trouble, would they pay a good price for the property? Probably not they just play hardball and offer it cheap because they know time is on their hand not Centro. 

too many unknown variables ...it could collapse it could survive who knows until Feb 15


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## SevenFX (19 December 2007)

So have you bought in ROE, or will you buy in.

What do you consider CNP fair value to be atm, and what do you base it on...????.

EDIT: It's been solddown since May of this year, from near doubletop at $10

SevenFX


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## jman2007 (19 December 2007)

dlineinvestor said:


> Centro Properties Group is a retail property investment and services organisation.
> 
> Centro has become one of Australia’s leading property owners with a portfolio valued in excess of $2.4 billion.  Ownership interest is held in 30 shopping centres across main population areas in five states; with over 2,610 specialty stores, gross lettable area of 823,433 square metres and annual sales in excess of $3.1 billion.
> 
> Retail property under management, following acquisition of the MCS Property business is nearly $5.2 billion, and with the inclusion of the recently announced acquisition in California, USA, is over 6 billion.  CT Retail has now been delisted and its properties acquired by Centro and Prime. Centro is now well established in the property syndication business, an area with assets under management of $2.1 billion and presenting great future opportunities.




Lol,

you gotta love the way some people sit back and with quiet pipe-puffing and beard stroking assurance state that the future prospects of a company "...presenting great future opportunities" without really knowing what that debt structure of a company is.  Still, I guess not many people could forsee the credit squeeze looming on the horizion, with Centro prime amongst them.  In hindsight, aggressive borrowers like Centro play a dangerous game highly leveraged to their ability to tap into a liquid credit market.  It's just that they chose a helluva bad time to do it, I might even go along to the firesale auction myself, might pick me up a shopping center or two for a couple of bucks!...


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## ROE (19 December 2007)

SevenFX said:


> So have you bought in ROE, or will you buy in.
> 
> What do you consider CNP fair value to be atm, and what do you base it on...????.
> 
> ...




No I'm staying away doesnt matter how cheap it look I been doing some digging and it doesnt look good.. check this article.../ could be aussie version of enron  .. while people busy with CNP I bought a nice stake in WWA  .. Boring business but I understand it and return exceptional value for their shareholders 

Centro fails on continuous disclosure and debt disclosure
Crikey, Tuesday, December 18, 2007

By Stephen Mayne, failed shareholder activist who never attended a Centro AGM

Shares in Centro Properties Group fell from $5.70 to $1.36 yesterday. This morning they hit a low of 42c before stabilising at 76c by midday as 130 million shares changed hands – meaning that the company worth $4.7 billion last Thursday is now worth just $630 million.

And while the broader Australian stock market followed Wall Street down another 2% in morning trade, the contagion effect has stabilised as shares in Valad and Goodman both recovered marginally, although Westfield tumbled another 59c to $18.98 as investors start to get nervous about the value of its huge portfolio of US malls.

The market clearly believes the Centro management company is stuffed and it will be the lenders owed $18 billion, plus the frozen wholesale co-investors in the shopping centres who will get first crack at Centro's 124 centres, 67 of which in the US are reportedly already on the market.

When a group is geared at 60% on inflated valuations, there isn't a lot of margin for error, so the game now becomes how much of the nominal $8 billion of equity can be salvaged.



Continuous disclosure laws are meant to avoid such unprecedented shocks and they have clearly failed Australian investors who have collectively dropped about $5 billion of their $1 trillion of super in Centro.

The big question is how Centro Properties Group could release this profit statement on 9 August. Go to page 11 and you'll see a table claiming it had no current interest-bearing liabilities and $3.6 billion of non-current debt.

This changed on September 18 when the annual report was released and page 34 disclosed $1.1 billion of current interest bearing liabilities and $2.5 billion of longer term debt.

Contrast that with page 19 of this presentation yesterday which revealed the following debt maturity profile for the parent company:

    Two months: $2.7 billion

    12 months: $1.2 billion

    More than 12 months: $2.8 billion

There is a little asterisk with the note "includes shares of US JV debt", which might explain the extra $3.2 billion of total debt not disclosed at all in the earlier statements, let alone correctly as either current or non-current.

Then, of course, there is the separate $5.6 billion of debt in Centro Retail Trust, which is somewhat more than the $1.44 billion they disclosed in the annual report sent out a few weeks ago.

However, this was before the merger with Centro America Shopping Trust was approved by unit holders on 12 October and it was clearly debt laden after the two big US acquisitions, Heritage and New Deal, over the past 18 months.

All of this looks like a pretty clear cut case of inaccurate market disclosure of debt. Wasn't that at the heart of Enron's problems?


----------



## waz (19 December 2007)

numbercruncher said:


> Further to that, assuming i have the numbers roughly correct, lets use CBA as example , 13pc stake = 650m loss, CBA last years profit was like 4.5b - so like equivalent of 15pc of last years profit gone in one foul swoop ?, scary stuff.




CBA arnt using their own money to buy shares in CNP, CBA invest on behalf of its funds, namely Colonial First State.

So its CFS which has lost 650mil, not CBA, which in other words means people like you and me who have super accounts.

The banks are investing using our money that we give them, not their own.

Whether you like it or not, there is a very likely chance that if you have any of your super money in Australian shares, then you are an investor in CNP.


----------



## Fed23 (19 December 2007)

Has anyone bought into this share?

As a newbie, I see massive amounts of trading but dont know to whom. All I know is they were 42c yesterday now they are up to 94c,  doubled their SP.


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## The Mint Man (19 December 2007)

Fed23 said:


> Has anyone bought into this share?
> 
> As a newbie, I see massive amounts of trading but dont know to whom. All I know is they were 42c yesterday now they are up to 94c,  doubled their SP.



This was to be expected, when a SP  loses like it has over the last week it is bound to bounce back, often refered to as a dead cat bounce. Often the upwards movement is due to day traders gettng in for a quick buck and as you can see anyone who got in yesterday has doubled up.

To any centro investors, I feel for ya. I was in BDG when it droped more than 50% in 1 day.

Cheers


----------



## J.C. (19 December 2007)

I jumped on these this morning at 0.90 and they just hit 1.14... in only an hour thats great news, hope it keeps up!!


----------



## ROE (19 December 2007)

Good luck to those who bought shares in this thing when they are low
but they are too risky for me


----------



## Nyden (19 December 2007)

I'm kicking myself for not buying these yesterday 
At the same time though, I would be double kicking myself if I had bought them, and they went down : If there's one thing my portfolio doesn't need, it's more red.

Still though, gosh, an 80% rise already..


----------



## The Mint Man (19 December 2007)

Nyden said:


> I'm kicking myself for not buying these yesterday
> At the same time though, I would be double kicking myself if I had bought them, and they went down : If there's one thing my portfolio doesn't need, it's more red.
> 
> Still though, gosh, an 80% rise already..



Cant agree more with you there But even if you chucked 1K at it.... nice christmas money thats for sure


----------



## surfingman (19 December 2007)

DJ Australian Bks Have A$4 Billion Exposure To Centro - Report
19/12/2007 11:36AM AEST



MELBOURNE (Dow Jones)--Australian banks have a A$4 billion exposure to stricken retail property manager, Centro Properties Group (CNP.AU), including almost A$1.5 billion in unsecured loans, the Herald Sun newspaper reports Wednesday.

Commonwealth Bank of Australia (CBA.AU) has the most at risk, with a total exposure of A$1.3 billion of which around half is believed to be unsecured. and not including the large losses that its Colonial First State funds management unit has incurred, the newspaper says.

Australian and New Zealand Banking Group (ANZ.AU) and National Australia Bank Ltd. (NAB.AU) also are exposed, with ANZ standing to lose up to A$1.2 billion, with almost A$500 million in unsecured loans, and NAB A$1.1 billion, of which about A$300 million is not secured, the Herald Sun reports.

Centro's biggest lender is JPMorgan which has more than A$2 billion at stake, the newspaper says.

Centro is struggling to refinance A$3.9 billion of maturing debt, because problems in the U.S. subprime mortgage market have forced it to look for expensive short-term money in a risk-averse global market.


Newspaper Web site: http://www.news.com.au 

   -By Melbourne bureau; 61-2-8235-2950; djnews.sydney@dowjones.com 


(END) Dow Jones Newswires

December 18, 2007 19:36 ET (00:36 GMT)

Copyright (c) 2007 Dow Jones & Company, Inc.


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## Nyden (19 December 2007)

The Mint Man said:


> Cant agree more with you there But even if you chucked 1K at it.... nice christmas money thats for sure




Exactly! Could have gotten myself a nice new TV or the likes 
Although, even with 1k - if I sold out at 70-80%, after CGT, wouldn't really have made all *that* much money.

Still though, prudence will eventually win the race 

But, it's the same with any form of gambling really, always kick myself for not betting a couple of thou on a horse, as opposed to $100 :


----------



## The Mint Man (19 December 2007)

Nyden said:


> Exactly! Could have gotten myself a nice new TV or the likes
> Although, even with 1k - if I sold out at 70-80%, after CGT, wouldn't really have made all *that* much money.
> 
> Still though, prudence will eventually win the race
> ...



True, but its almost a given that shares like this bounce after a big fall, take BDG and Rams for example. Also CGT or not... still banking a profit and thats good news in my book

Cheers


----------



## Lukas (19 December 2007)

Is an ASIC investigation warranted? I have issues with their disclosure of debt in their annual reports.


----------



## Wealth Wizard (19 December 2007)

CNP has been a day trader dream the last few days with high volume and good swings. Its been on the down trend over the last few days, but the market have also closed lower over the last week so this might be misleading.


----------



## eMark (19 December 2007)

Does anyone see the stock gapping up tommorrow on open?. 

The stock finished today well above it's close yesterday, even though it was down 30c from todays high.


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## The Mint Man (19 December 2007)

Lukas said:


> Is an ASIC investigation warranted? I have issues with their disclosure of debt in their annual reports.



Been there done that.
Probably not Lukas. Check out the BDG thread and go back to posts at around January this year... same sort of ASIC questions were being raised. And to add to it they, BDG, had only just raised $80 million through a share placement, imagine how those new BDG holders felt....

I take it your a Centro holder? if so I feel for ya. It is truly a horrible feeling, thats for sure.

Cheers


----------



## Wealth Wizard (19 December 2007)

Perhaps it may gap up on tomorrows open, after market action at high volume and to the upside +0.005, guess we wait and see.


----------



## Go Nuke (19 December 2007)

I think it may depend on how well the DOW does tonight.

The chart looks good in my opinion after some recent falls to place the DOW sitting pretty much right on its 200 day moving average.

I'd look for a rally possibly back up to 13400- 13500.

I threw a few dollars at CNP yesterday but am pretty nervous about when it will turn tail and head down again.


----------



## eMark (19 December 2007)

Is the gap, the amount of pre orders before open of buyers wanting to get in, at the best price?

This morning it opened up 15c. Then it continued to move up an hour later after Centro announcemnet re where the company stood on the matter

The news announcement and coverage in the media may help. Who knows?

Wealth Wizard - When you wrote _"market action at high volume and to the upside +0.005" _are you referring to todays action? and the half a cent? what do you mean by that?


----------



## Wealth Wizard (19 December 2007)

Yes it's in reference to todays close, generally at 4:00 those wishing to try and get into the stock raise their bids and those trying to get out lower their offers, a price is met and trades go off at this value, a higher after market price compared to the last on-market price indicates a buying momentum, and given the large volume at 4:10pm I would not be surprised if it does not open at a positive gap tomorrow.


----------



## eMark (19 December 2007)

Brilliant information. Thanks mate!

-----------------------------------------

Big sale after the close

Date           Time       Price ($) Quantity Value ($)  Conditions 

19-12-2007 04:48 PM $1.205 592480 $713,938.400 Late Trade,Crossed


----------



## stockwhizben (19 December 2007)

The as of last week top 50 oz company is not some tiny speccy with no real business or someone searching for minerals that dont exist. it brings in the cash and IMO there is no way they will let it go into liquidation without a massive fight or the banks give up on it. ill be back to post on feb15 and i predict that centro will get their funds by this date at least for a little while longer and more time to fix the business will have been bought. At the expiry of this debt, say 6-12 mths or whatever, they may be able to borrow the money again at lower rates as they have been previously used to as the credit crunch surely must subside by then. However, this risk cant be taken as have been burnt before so will fix the business, IMO go back to just Oz shopping centres and get out of the US. I reckon the SP will be at 3 or 3.50 when they announce they have managed to borrow after all around mid-Feb. Dont think it will get to the 8-9 level for many years when confidence in the company is rebuilt


----------



## michael_selway (19 December 2007)

Go Nuke said:


> I think it may depend on how well the DOW does tonight.
> 
> The chart looks good in my opinion after some recent falls to place the DOW sitting pretty much right on its 200 day moving average.
> 
> ...




Hi yep abit liek RAMS, droped and rebouded btu eventually sank further slowly

As long as you buy low, it reduces the risk in a ST play like this!

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 58.7 47.2 50.4 53.6 
DPS 39.8 47.3 50.4 53.9 *

thx

MS


----------



## bearmarket (19 December 2007)

Why were financial advisers and brokers and other experts recommending Centro for investments up until before the fall in the shares. A lot of people must have lost money on their investments in Centro.

bearmarket


----------



## vishalt (19 December 2007)

bearmarket said:


> Why were financial advisers and brokers and other experts recommending Centro for investments up until before the fall in the shares. A lot of people must have lost money on their investments in Centro.



Because this is like a car crash, no-one just goes out of their way to die on the road.

Up till this point Centro had a good plan to acquire malls use their yields to pay good distributions from their shares and funds, that is exactly the type of thing certain audiences who invest in shares or funds want, reliability with constant income -- hence its an attractive product for planners and brokers. 

Blame the US sub-prime debacle for making banks so paranoid that they wouldn't even lend a business like Centro which had a secure plan to make money (albeit it did overgear but everyone makes mistakes).


----------



## Noskcid (19 December 2007)

Haha, the question is how far up will it climb, till it falls back. Alot of ppl would be jumping in the water now and they will either come out soaked or really dry. 

But either way they wont let a company of this size just die without a word. 

 I went away for a few days and look what happens the perfect chance. $1.20 is still good but we'll see what happens tmr.


----------



## numbercruncher (20 December 2007)

> AUSTRALIAN banks have a $4 billion exposure to stricken retail property manager Centro Properties Group, including almost $1.5 billion in unsecured loans.
> 
> Commonwealth Bank of Australia has the most at risk, with a total lending exposure of $1.3 billion of which about half is believed to be unsecured.
> 
> ...





http://www.news.com.au/couriermail/story/0,23739,22947230-3122,00.html

Big ouch for CBA, how many more hits I wonder could our banks take of this magnitude before serious serious serious trouble ?


----------



## So_Cynical (20 December 2007)

St George as well.



			
				link said:
			
		

> ST GEORGE Bank has a $400 million exposure to trusts operated by the troubled Centro Properties Group, according to chairman John Thame.
> 
> Speaking after the bank's annual meeting in Sydney yesterday, Mr Thame said the bank had given 20 or 30 loans to trusts managed by Centro totalling about $400 million.




http://www.theaustralian.news.com.au/story/0,25197,22950915-643,00.html

Apparently St George is a secured creditor ......................:dunno:


----------



## Freeballinginawetsuit (20 December 2007)

There would have been a raft of bean counters wading through CNP's financials on Monday night. 
The sad fact of these leveraged trusts (and CNP at about 50/50 is pretty tame) is that there accounting procedures are as cloudy as a glass of milk. Geez even getting a firm grip on an accurate asset/liabilities number is next to impossable.
I wasn't even fussed about them being able to source funding for debt rollover, just the number of assets held and pinging a potential net worth....... enabling a educated punt for Tuesday.

After several hours I came up with pretty much zip to go on!.

I bet there are some pretty red faced insto's/fin advisors doing the ostrich to there clients now


----------



## vishalt (20 December 2007)

You know what, I knew it. 

Like they say, if something looks way too good, its bloody not true. I knew it, there would be something to hit the Aussie banks from sub-prime, banks around the world from even Canada and Norway have been vaporized by this, and now finally its our turn. 

GO SHORT ON BANKS!


----------



## Nyden (20 December 2007)

vishalt said:


> You know what, I knew it.
> 
> Like they say, if something looks way too good, its bloody not true. I knew it, there would be something to hit the Aussie banks from sub-prime, banks around the world from even Canada and Norway have been vaporized by this, and now finally its our turn.
> 
> GO SHORT ON BANKS!




Yes, I don't know why everyone is so positive on the financial sector...aren't they kind of at the center of all this?  I know I wouldn't touch any banks, ANZ especially, ugh, price hasn't moved an inch in well over a year.


----------



## Wealth Wizard (20 December 2007)

Looks like it gaped up this morning, congrats to anyone who got in yesterday, I think it will close higher today as most investors have probably bought in at bargain prices over the past few days.


----------



## Fed23 (20 December 2007)

I got out this morning. worried it might flop later today, yesterday close it started to drag so might get back in later.


----------



## TheRage (20 December 2007)

Freeballinginawetsuit said:


> I bet there are some pretty red faced insto's/fin advisors doing the ostrich to there clients now




Only the bad ones .

We don't have any client's in centro directly and out of managed funds recommended only one has exposure to centro of 2% total portfolio. To be honest a lot of advisers don't do a lot of LPT spruking these days for income plays anyway due to westpoint etal. Yield is good, longevity is better.


----------



## Junior (20 December 2007)

vishalt said:


> You know what, I knew it.
> 
> Like they say, if something looks way too good, its bloody not true. I knew it, there would be something to hit the Aussie banks from sub-prime, banks around the world from even Canada and Norway have been vaporized by this, and now finally its our turn.
> 
> GO SHORT ON BANKS!




ANZ has a PE of 12.8 and a div yield of 5.3% fully franked. Expected earnings growth and dividend growth going forward with no direct exposure to sub prime.

I'd say it's not a bad defensive play with a strong, reliable dividend.


----------



## Aussie2Aussie (20 December 2007)

Wealth Wizard said:


> I think it will close higher today as most investors have probably bought in at bargain prices over the past few days.




I would have thought that would be a good reason why it will close lower - locking in profits, not higher.


----------



## Nathan_b (20 December 2007)

the way its going at present it wil close lower then yesterday. down to 1.25 at present. should have sold at 1.45 this morning, thats what happens when ur greedy i guess.

hahahaha


----------



## Wealth Wizard (20 December 2007)

> I would have thought that would be a good reason why it will close lower - locking in profits, not higher.




Yes, I guess it depends on when they got in, I was thinking todays strong open would push up bids a bit more as some investors may be thinking slightly longer term momentum and try to get into the stock today, but It seems im wrong and the portion of profit takers after the morning jump must be too strong, given the stock is worth $1-$2 its probably useless to assume short term investors would be interested, and if they are price would be more effected by arbitraguers than one off volume trades.


----------



## Go Nuke (20 December 2007)

Fed23 said:


> I got out this morning. worried it might flop later today, yesterday close it started to drag so might get back in later.




I was out this morning too.

Saw a large sum of people and about 3Mil+ shares wanting to be sold at $1.50 and thought it would be too much to overcome, so was out at $1.45 for about a 60% gain in 2 days

Didn't put much into it though as I got burnt with AED trying the same stunt

If it can get past $1.50 where it has stopped 2 days in a row now,  then perhaps it will run a little further.


----------



## vishalt (20 December 2007)

Junior said:


> ANZ has a PE of 12.8 and a div yield of 5.3% fully franked. Expected earnings growth and dividend growth going forward with no direct exposure to sub prime.



ANZ is also the worst performing bank in this country of both the pillars and the regionals, and it now has exposure to Centro which is on the brink of collapsing.
[/QUOTE]


----------



## Santoro (21 December 2007)

Volume

120 million mon
260 million tues
220 million wed
120 million thurs

If the banks held 92% of 845 million shares, I assume they are off loading them in an attempt to reduce theri exposure, around 1.50 is better than nothing.

I held these (small amount) but sold yesterday when it couldn't push through 1.50. Felt it was the banks trickling some of their holdings out. 

With the US, EU and Swiss central banks prepared to supply 500+ billion to the financial markets, there would have to be a strong possibility Cantro will be able to get the funds albeit at a costly rate.


With some 2/3 of the total shares traded one could expect that there wouldn't be as many sellers about and the price will either hold or start moving up....


----------



## nioka (21 December 2007)

Santoro said:


> Volume
> 
> 120 million mon
> 260 million tues
> ...




With the way the price has fluxuated some of those shares would have been traded three or four times at least. A lot listed for sale now were also probably recently bought.


----------



## godzillaismad (21 December 2007)

Well, just got out at 1.23 at an entry price of 0.61... there are too many factors weighting down this stock at the moment. The latest article about the management hiding $1 billion debt is not a positive one. Good luck to other holders.


----------



## UPKA (21 December 2007)

Santoro said:


> Volume
> 
> 120 million mon
> 260 million tues
> ...




with the current SP, it gives CNP a market cap of $1.5b. With over $5b debt to be due shortly, $1.4b due in 2mths. I think thats really pushing it, CNP will need to sell off some of its assets soon, and cheaply... I think at $1.20, it reflects the company's value correctly, too much uncertainty at the moment, so I dont see any value in it at all.


----------



## Nathan_b (21 December 2007)

Centro Existing CMBS Facilities Update
Centro Properties Group ("Centro" or the "Group") makes the following comments about its
two commercial mortgage backed securities ("CMBS") transactions, Centro Capital Series 2
and Centro Shopping Centre Securities 2006-1, which involve various Centro managed
funds:
Solid Collateral Performance
• As at 30 June 2007, the value of the collateral in Centro Capital Series 2 has increased
by A$102.2 million (16.2%) since the date of the last "Tap" issuance in June 2006. The
Net Operating Income (“NOI”) Growth and Moving Annual Turnover ("MAT") for the
same collateral have increased by 11.4% and 4.6%, respectively, over the same period.
• As at 30 June 2007, the value of the collateral in Centro Shopping Centre Securities
2006-1 has increased by A$202.7 million (12.1%) since the date of issuance in
December 2006. The NOI and MAT for the same collateral has also increased by 2.6%
and 12.0%, respectively, over the same period to 30 June 2007.
Improved Loan to Value Ratios ("LVR") and Interest Coverage Ratios ("ICR")
The LVRs for both transactions have improved consistent with the performance of the
collateral properties.
• The LVR for Centro Capital Series 2 has improved from 48.3% to 41.6% for the
period June 2006 to June 2007;
• The LVR for Centro Shopping Centre Securities 2006-1 has improved from an
average of 53.9% to 44.2% in the period December 2006 to June 2007;
• The average ICRs for Centro Capital Series 2 and Centro Shopping Centre
Securities 2006–1, on a hedged basis, are 2.16 and 1.95 times, respectively (based
on July 2007 NOIs); and,
• On an unhedged basis the current ICR, based on June 2007 NOIs, for Centro
Capital Series 2 is 1.75 times and 1.54 times for Centro Shopping Centre Securities
2006-1 (based on June 2007 NOIs).
Funds Fully Compliant with Transaction Covenants
Centro has advised that neither it nor its managed funds are in breach of any lending
covenants. This includes both Centro’s CMBS transactions referred to above.
Minimal Increase in CMBS-secured Debt
Since the date of the Centro Capital Series 2 "Tap" issue in June 2006 and the CSC 2006-1
issuance in December 2006, the only increase in debt secured against the collateral has
been a A$21.25m subordinated facility provided to CMCS 25. The increase is less than a
1% increase in total debt for the transaction and is compliant with the transaction’s Permitted
Indebtedness covenants.
Centro has reiterated that it is not under any obligation to sell assets and would only do so
selectively if necessary. The Group is not obliged to take any specific course of action over
the next eight weeks. What is required is the development of a strategic plan or road map to
successfully operate the Group on an ongoing basis.
ASX/MEDIA RELEASE
-2-
Centro Properties Group specialises in the ownership, management and development of
shopping centres.
Please visit www.centro.com.au for more information.

sounds like a pretty confident media release about the future of the company??
what do others think?


----------



## stockwhizben (21 December 2007)

its a nice statement if anyone can understand it. thats the thing, the company is too complicated and this is just another example of over complicating things. it will be a mission to unwind all the syndicates, who owns what and in what proportion does CNP own, what proportion investors in the syndicates owns, what proportion is debt. everything im reading says that the debt is complicated and no one can put an exact number on it with the on and off balance sheet situation. also the current liability versus non current liability could cause a problem and could cause legal problems. stick with stocks you know and know their structures. eg woolworths, brambles. miners
anyway thats what i do


----------



## lbradman (22 December 2007)

Right I've been trying not to say anything about this but heck hearing this statement would probably send shudders throughout this board.

I AM A HOLDER OF THE CENTRO DIRECT PROPERTY FUND.

I've got 25K invested in this fund right now and theres no chance I can withdraw from it as the company has used their "responsible entity" to suspend any withdrawals from the fund following the announcements.

I only went with them because of their morningstar rating of 4 and relatively cheap MER ratio as well as a very big name but who would know they would have had this big a problem? Before the end of last week if you would have mentioned Centro to anyone here they would have endorsed it as a good investment in indirect property. I've really lost all faith in investing in australian companies after this. The level of company disclosure here is quite a FARCE and the role of ASIC and other regulators is no more than to be seen as having a watchdog so investors can feel a little more assured. But they have hardly done enough and I'm sure you'll find insider trading is rampant here more than anywhere else. I've also noticed the reaction of the markets here to a big name company affected by the global credit issues is far more severe than what occurs overseas. Look at CountryWide Financials in the US after it was hit with debt problems it didnt drop more than the 100% that CNP went through at the start of the week.

What protection does the retail investor have under these circumstances? Are we at their mercy right now?


----------



## tronic72 (22 December 2007)

lbradman said:


> Right I've been trying not to say anything about this but heck hearing this statement would probably send shudders throughout this board.
> 
> I AM A HOLDER OF THE CENTRO DIRECT PROPERTY FUND.
> 
> ...




I think the best Rd for you is to speak to a lawyer. All you will get on here are opinions, rather than concrete information.

That said, I'd say at this stage you can only play the waiting game. I think it's actually a good idea that your funds can't be withdrawn but I think it's a shame you, the small investor has to foot the bill. 

On the plus side, the company is far from doomed. They are in trouble but they have good assets and cash flow. I'd be very surprised if someone wasn't willing to lend them the money. If someone like Centro was left to die the whole market would suffer via a loss in market confidence and this is something I don't think the big boys are willing to let happen. 

I think this is a real wake up call for the industry. Hopefully it will make these companies more transparent and conservative with the amount of debt they take on.

Have a good Christmas.


----------



## tronic72 (22 December 2007)

UPKA said:


> with the current SP, it gives CNP a market cap of $1.5b. With over $5b debt to be due shortly, $1.4b due in 2mths. I think thats really pushing it, CNP will need to sell off some of its assets soon, and cheaply... I think at $1.20, it reflects the company's value correctly, too much uncertainty at the moment, so I dont see any value in it at all.




I think MQG recently sold their share in the company which I'm pretty sure was a majority (large) holding in Centro.


----------



## tronic72 (22 December 2007)

*Centro faces $100m action*

CENTRO Properties Group will be sued, possibly for hundreds of millions of dollars, over its failure to make proper disclosure of more than $1 billion of debt in the months leading up to its implosion on Monday.

See article at: http://www.theaustralian.news.com.au/story/0,25197,22961325-643,00.html

Shares will surly dive on Monday after this news.


----------



## michael_selway (23 December 2007)

*Re: Centro faces $100m action*



tronic72 said:


> CENTRO Properties Group will be sued, possibly for hundreds of millions of dollars, over its failure to make proper disclosure of more than $1 billion of debt in the months leading up to its implosion on Monday.
> 
> See article at: http://www.theaustralian.news.com.au/story/0,25197,22961325-643,00.html
> 
> Shares will surly dive on Monday after this news.




Hm it may go into trading halt, then it might be game over 

*CENTRO Properties Group will be sued, possibly for hundreds of millions of dollars, over its failure to make proper disclosure of more than $1 billion of debt in the months leading up to its implosion on Monday.*



> The threat came as it was revealed that the "error" in Centro's August accounts masked a $450 million funding hole, which would have shown the company was unable to pay its short-term debts.
> 
> Plaintiff law firm Maurice Blackburn yesterday confirmed it would proceed with legal action against the shopping centre giant and said it had been in "discussions" with several of Centro's major institutional investors regarding the class action.
> 
> ...


----------



## Santoro (23 December 2007)

Will be interesting Monday then....could be in for some ridiculous prices....if they are able to get there finance and stall the court case for long enough to get into a better position, then if these go cheap enough monday (talking lower than 40 cents) might be worth risking something if you're prepared to lose it......big risk may equate to big gain....don't expect Centro to fold without a fight


----------



## tronic72 (23 December 2007)

Hmmm I'm with you there but I dunno if I've got the balls. Would have to put up at least $5000 to make it worth the risk and I'm a bit down after the last weeks trading. Tempting though. I still think they "should" be able to pull it off. What these lawyers forget (or maybe they just don't care) is, if they are successful with their suit then Centro will have a much slimmer chance of pulling it off so everyone looses

I have visions of Vulchures picking the skin of a half dead horse


----------



## eMark (23 December 2007)

From what I have read on several  forums, and news sites, the SP may not drop on Monday. JP Morgan have re rated the stock at about 3.57 I think.


----------



## Santoro (23 December 2007)

eMark said:


> From what I have read on several  forums, and news sites, the SP may not drop on Monday. JP Morgan have re rated the stock at about 3.57 I think.




Just keep in mind that JP Morgan were holding 14+ percent of this stock a couple of weeks ago......I'd be re-rating it too in an upwards direction if my company owned 100+ million shares of it.....


----------



## tronic72 (23 December 2007)

eMark said:


> From what I have read on several  forums, and news sites, the SP may not drop on Monday. JP Morgan have re rated the stock at about 3.57 I think.




Hmmm. You think they don't have a lot to loose as a major share holder??? Keep in mind that rating was prior to the new they'd be sued. There's many people talking about them performing a lazarus but it's another thing to risk your cash. Might be worth a CFD though.


----------



## vishalt (23 December 2007)

Santoro said:


> Just keep in mind that JP Morgan were holding 14+ percent of this stock a couple of weeks ago......I'd be re-rating it too in an upwards direction if my company owned 100+ million shares of it.....




hahahhahaha good one, of course it'd be a buy for JP Morgan. They'd be the biggest loser of Centro liquidated!


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## P.O.D (23 December 2007)

Hi Guys

Just wanted to give my take on this one. 

Firstly there would be no way that the banks or any of the financial institutions that have a vested interest in this one would let it go to the wall. Just think about it, the banks have billions of dollars in loans to the group's different funds the ones with first mortgages such as St.George are fine - sell the property, repay the loans, the rest goes back to the investors in the fund and the fund is wound up. Centro Properties Group or CNP as listed on the stock exchange is an investor in many of these funds, which is where they get their stupid co-investment business model from, they would get some of the "left over". The issue is where the banks have unsecured loans. It has been reported that the services business where the company earns all the funds management income from was last valued by KPMG at $5b in June 2007. There have been presentations from the business that this valuation has given the company leverage to buy additional property therefore l am assuming that the company has borrowed against this valuation to fund some of these acquisitions and this would be the area that the banks would be very worried about. Any liquidation would place a nil valuation of the services business therefore the banks have a lot to lose. 
My understanding is that the bank that pulled out of the deal at the last minute was the Bank of America as the loans they are talking about where the loans used to purchase New Plan Excel the lastest acquisition. With whats going on over in America the bank probably didn't want this loan on their balance sheet as at the end of December (There financial year end). Come Feburary you will find that they will come to the party by refinancing these loans at an interest rate that would be very favourable to them.
If Centro can't refinance the loans then the company would need to sell assets to repay debt and lower gearing. The problem with this is that the assets that would go would be the jewels in the crown all the better assets which as all Australian assets. Mind you they would go for a excellent price as quality retail property in Australia is as scarce as hens teeth. But then this leaves Centro with a lower quality portfolio of assets and most of them in a country on the brink of recession. Yes the assets are convience based anchored by supermarkets which are recession proof but when you have some many of them in one market even a quarter of percentage increase in cap rates is going to hurt the asset value and gearing. 
Best case scenerio would be an equity injection by a joint venture which is also a possibility. If this does happen unfortunately the damage to the Centro brand is already done through poor quality disclosure and transpenacy of the business through its complicated model. A lot of investors have been burnt by this one and the ones that made this company at top 50 ASX company, the instuitational investors have been burnt the worst. Barclays and UBS were still buying the stock up until the crash on Monday, if they had no idea what hope did the mum and dad investors have. Investor confidence is gone and it will take another 10-15 years for the company to get it back. The company will be disemated by class actions from various groups and they have a very strong case for non-continuous disclosure. The class actions will only go ahead once they know the company will survive there is no point going through the courts when you come out the end a winner and there is nothing left. 
I think this company will survive in one form or another but it will never be the beast it once was. As they say it takes years to build a business but only a day to destroy it!
Good luck with this one.


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## waz (24 December 2007)

Excellent analysis P.O.D !!!

Good to see you put some thought into it.

I agree with you, like you say, no bank wants Centro to go to the wall.


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## Nathan_b (24 December 2007)

24 December 2007
Centro Board Appoints Advisers
The Board of Centro Properties Group (“Centro” or the “Group”) has appointed three key
firms to serve as advisers to Centro’s Board and management to assist with the Group’s
previously notified strategic review. That review will consider options available to secure the
long term capital structure of Centro and its managed funds to reduce current gearing levels.
The advisers are:
 Lazard Carnegie Wylie;
 KPMG; and,
 Freehills.
In seeking to refinance its short term maturing facilities and ultimately reducing the gearing
of the Group, Centro has a number of options available to it including sale of interests in
managed funds, joint venture of assets, asset sales and/or equity issuance. Centro is
required by 15 February 2007 to develop a strategic plan or “roadmap” to successfully
operate the Group on an ongoing basis.
About Centro Properties Group (ASX: CNP)
Centro Properties Group specialises in the ownership, management and development of
shopping centres.
Please visit www.centro.com.au
ASX/MEDIA RELEASE


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## shinobi346 (27 December 2007)

*Centro ready to sell assets*

http://www.news.com.au/couriermail/story/0,23739,22971762-3122,00.html

Centro ready to sell assets


Ben Butler

December 25, 2007 11:00pm

TROUBLED shopping centre operator Centro has moved a step closer to selling off some of its assets, appointing a trio of heavyweight advisers to help it work out a plan to save the company.

The company's board will be advised by merger and divestiture specialists Lazard Carnegie Wylie, accountancy giant KPMG and top-tier law firm Freehills, Centro informed the stock exchange on Monday.

Centro, Australia's second-biggest shopping centre operator, has until February 15 to come up with a rescue plan that satisfies its bankers.

The company urgently needs to refinance $3.9 billion in current debt, out of total debt of $17.9 billion.

Centro has already set up a data room, which is being used by the group's bankers to keep track of transactions.

This data room will in time be opened to potential bidders for the company's assets, sources said.

In a statement to the ASX, Centro said that options available to the company included selling off its interests in funds it manages, entering into joint ventures, selling shopping centres and issuing new equity.

It is understood potential buyers will be interested in buying real estate funds currently operated by Centro, rather than underlying assets.

First on the block could be the company's 50 per cent holding in its $2.5 billion Australian wholesale fund and its $1.2 billion American wholesale fund.

Centro chief executive Andrew Scott this week talked down the potential for trouble with corporate regulators over August filings with the ASX which failed to properly classify $1.1 billion of debt as current.

He said the accounts in which the error was made were unaudited, and a correction was made in the final, audited, report for financial year 2007.


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## Quixis (31 December 2007)

Centro has stated they don't need to sell assets. You got to love the media. Two weeks ago some journo's writing "The share price's journey on its way to zero". A complete dork.

Just watch the SP start rising come Wednesday. Work on facts not FUD.


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## brodion (31 December 2007)

Quixis,
        Where is the info on sale of assets.Can u point me in the right direction??? Have not monitoring this one???


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## Nathan_b (2 January 2008)

Centro Board Invites Expressions of Interest
As previously advised, the Board and management of Centro Properties Group (“Centro”)
and their advisers are undertaking a strategic review process. This review includes
evaluating options to secure the financial structure of Centro and its related entities,
including Centro Retail Trust, on a timetable consistent with that agreed with the group's
banks.
Mr Brian Healey, Chairman of Centro, said, “In recent days, we have received a significant
number of unsolicited expressions of interest from a range of strategic and financial
investors in potential investments in the group and certain of our assets.
“Therefore, as part of the strategic review process, Centro is now seeking expressions of
interest for key alternatives available to it.
“This will enable interested parties to substantiate their interest, and for all such proposals to
be evaluated from the perspective of the best interests of all Centro stakeholders.”
The Board believes that it is appropriate to adopt a process that allows the effective
evaluation of any expression of interest on an equal basis and to ensure consideration of a
wide range of alternatives for the best interests of all stakeholders. Expressions of interest
are therefore being sought for either or both:
• A whole of group review, including a recapitalisation, equity issuance or acquisition
of Centro; or
• The acquisition of the group’s interests in its Australian and US wholesale funds.
Parties wishing to participate in this process should contact Centro or its advisers, Lazard
Carnegie Wylie.
For further information:
Mr Andrew Scott or Mr Jeremy Mead
Chief Executive Officer Lazard Carnegie Wylie
03 8847 0033 03 9657 8400
andrew.scott@centro.com.au jeremy.mead@lazard.com
About Centro Properties Group (ASX: CNP)
Centro Properties Group specialises in the ownership, management and development of
shopping centres.
Please visit www.centro.com.au
ASX/MEDIA

i knew this little B1TCH has legs left.

its up 20% today.


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## ROE (2 January 2008)

Look like they wont be able to refinance  by Feb 15
so fire sale going ahead ... no one going to pay premium price for their asset knowing they dont have a choice..sell cheap or go bust 

Centro is going to do a RHG style


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## Quixis (2 January 2008)

LOL Roe, where do you read that in the announcement?

No unless they are telling lies, Many expressions of interest = competition.

"Competition" unless in collusion doesn't equal bottom dollar prices. You should know that being in the share market.

I'd be suggesting CNP and the 3 Amigos are taking the opportunity to revisit the company's total situation regarding finances and gearing.

Some bidder may say. Okay the company is worth X. It makes Y dollars cash flow and we'll agree to take it all on board for Z much.

But it is business so who ever knows outside the company board room.


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## nioka (2 January 2008)

ROE said:


> Centro is going to do a RHG style




There is a big difference between the two. Rams did not OWN property they only held mortgages so they had no property to sell unless by default. CNP do OWN the property so they can sell property. Only my opinion, I hold neither RHG or CNP (but I am watching CNP closely).


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## surfingman (2 January 2008)

nioka said:


> There is a big difference between the two. Rams did not OWN property they only held mortgages so they had no property to sell unless by default. *CNP do OWN the property so they can sell property*. Only my opinion, I hold neither RHG or CNP (but I am watching CNP closely).




Isn't the whole problem CNP don't actually own the property? The supplier of the funding to purchase does... (or shortly will) 

They are in too much debt to pay for the property they partly own...

I could have it wrong, correct me if i am...


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## UPKA (2 January 2008)

surfingman said:


> Isn't the whole problem CNP don't actually own the property? The supplier of the funding to purchase does... (or shortly will)
> 
> They are in too much debt to pay for the property they partly own...
> 
> I could have it wrong, correct me if i am...




agreed, most of their assets are debt funded. so I dont think they'll be any better off selling the assets, if they do, the losses will be big. Even if there are lots of bidders if the sales do go through, im sure no buyers is will pay premium for properties in US at the moment.


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## nioka (2 January 2008)

UPKA said:


> agreed, most of their assets are debt funded. so I dont think they'll be any better off selling the assets, if they do, the losses will be big. Even if there are lots of bidders if the sales do go through, im sure no buyers is will pay premium for properties in US at the moment.




I would sooner be trying to sell property that has a mortgage over it than to try and sell the mortgage. I was in this situation myself in the 80s with loans I had taken, and given mortgages over property, where the loans were in swiss franks. Another story. But I did sell property at my price and repaid the loans. I did not sell ALL my property. I had friends who allowed the banks to take the properties and sell at bargain prices. They lost out, some went bankrupt. It all depends on how much property CNP have at the end.


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## nioka (2 January 2008)

surfingman said:


> Isn't the whole problem CNP don't actually own the property? The supplier of the funding to purchase does... (or shortly will)
> 
> They are in too much debt to pay for the property they partly own...
> 
> I could have it wrong, correct me if i am...




If you buy a home and have a mortgage because you borrowed to buy it you still are the owner (with restrictions). You have the right to sell the home. The only problem is if it is worth less than the mortgage. I doubt this is the case with Centro.


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## ROE (2 January 2008)

nioka said:


> There is a big difference between the two. Rams did not OWN property they only held mortgages so they had no property to sell unless by default. CNP do OWN the property so they can sell property. Only my opinion, I hold neither RHG or CNP (but I am watching CNP closely).




Like all property purchase you dont own anything until you pay out your debt.
You can control the property asset and get the income but when it comes to crunch time and cant repay your interest, the liquidators comes in and sell the asset and pay it back to the bank, what left over is your after all the debt is pay but in these cases Share holders usually get nothing  if sh**t happens ..

They may end up where the debt cost more than the mortgage because CNP pay premium price for alot of properties they acquire, they wont be getting the same premium if they force to sell doesnt matter how many competition they got for the bid.
these buyers are not stupid..they wont pay the price when CNP bought the properties, why the hell do they want to pay the premium now knowing the company is in trouble and they have no choice but to liquidate some of the asset.

take an example from Westfield...they stop buying in the US a while ago because they reckon there is no values in those properties but CNP keep going ahead and pay crazy price for them.. Westfield can now sit back and grab stuff cheap otherwise they dont touch it at all and if CNP goes to sh**t it one less competition for Westfield ... a win-win for them.


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## Aussie2Aussie (2 January 2008)

nioka said:


> The only problem is if it is worth less than the mortgage. I doubt this is the case with Centro.




More to the point, what is left may not reflect the shareholder value.

I expect that the final value will be well below the present share price...happy to be proved wrong and keen as to buy in should re-financing prove possible.


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## oldblue (2 January 2008)

Yes, value is still a bit murky at this stage.

I've had a small nibble    but suspect may be a bit premature.


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## Aussiejeff (3 January 2008)

ROE said:


> Like all property purchase you dont own anything until you pay out your debt.
> You can control the property asset and get the income but when it comes to crunch time and cant repay your interest, the liquidators comes in and sell the asset and pay it back to the bank, what left over is your after all the debt is pay but in these cases Share holders usually get nothing  if sh**t happens ..
> 
> They may end up where the debt cost more than the mortgage because CNP pay premium price for alot of properties they acquire, they wont be getting the same premium if they force to sell doesnt matter how many competition they got for the bid.
> ...




Good summation ROE..

These "interested parties" that CNP refer to will be sniffing for bargain basement, fire-sale prices - that in all probability won't total enough to get CNP out of the melt-down pot. I personally wouldn't touch Centro shares with a barge-pole right now...

AJ


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## zefstar (3 January 2008)

Do you think that CNP will still be trading toll February 15, or do you think there doomed way before then.


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## UPKA (3 January 2008)

zefstar said:


> Do you think that CNP will still be trading toll February 15, or do you think there doomed way before then.




here are traders who are willing to take a punt on this. even alot of mum and dad traders are getting into it on the perception that someone will dig CNP out of the current situation. myself a lot know a lot of families taken money out of their mortgage and bought into CNP at around the $1 mark , thinking it would go back to it's glorious days of $10 in the future... in my opinion, there is still a chance for CNP, a punt is still viable, but definitely not at $1, or $1b+ market cap. As to cover its short term debt, CNP would need to sell majority of its assets at basement price in a short time frame. So in short, the "risk takers" will keep the price at its current level for now, until the reality hits them...


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## onecap (3 January 2008)

Brokers bullish on Centro sale

SYDNEY AAP
2008-Jan-03 01:40 PM

Brokers believe Centro Property Group will ride out its credit crunch woes and that its securities could rebound to within the $2 range.

The nation's second-largest owner of shopping centres went into a tailspin midway through December when it was unable to refinance about $1.3 billion of maturing debt.

The company was nearly annihilated by investors, losing more than four-fifths of its market capitalisation.

Since then, Centro securities have stabilised around the $1 - $1.10 range and on Wednesday, it announced it had received unsolicited approaches from parties wishing to invest in the group or buy up some of its assets.

In response, Centro said it was open to offers that maximised the interests of its security holders.

Aequs Securities institutional dealer Ric Klusman said there was now a lot of chatter in the market about either financial institutions or rival shopping centre operators buying in.

"The rumour is that they are talking to Westfield," Mr Klusman said.

"Westfield sold them a lot of assets and whether Westfield wants to buy them back or not, I think they will now ride through this, this is different to the RAMS situation."

At 1336 AEDT Centro Securities were up 6.5 cents, or 5.77 per cent, to $1.10 in a broadly weaker market.

That was fuelled partly by media reports that US hedge funds Blackstone and Citadel had flown teams to Australia to participate in the Centro sale.

Mr Klusman said he would be surprised if Centro's advisers, Lazard Carnegie Wylie, hadn't attracted the interest of such global finance giants.

"I think it's an opportunity for someone to raid them and my gut feeling is you're going to get a bid and the buyers are positioning to get themselves a good deal," he said.

"Carnegie Wylie are very professional advisers and I would think they'd be naturally talking to all these people as a matter of course."

He also pointed to the huge volume of trade in Centro securities and said it would not be difficult for a potential suitor to quietly build up a significant stake in the company.

"About ten per cent of the company was traded yesterday, and if you went in gently over a week and soaked up ten per cent and then said you'd lend them the money needed to cover the financing problems, you'd be pretty well placed," he said.

Mr Klusman predicted the stock will "go back to $2".

By Nick Lucchinelli


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## mrWoodo (3 January 2008)

Good to hear, Onecap! The sheer amount of volume over the past week cannot be attributed to mum and dad traders + day traders. 

The last few substantial shareholder notices released :

Barclays reduced 9.32% -> 7.96%
then another notice, reduced the 7.96% down to 6.83%
CBA reduced 11.07% -> 10.11%
MacBank reduced, tho I don't have the %ages

and on the other hand UBS increased 5.09% -> 8.63%

Who is soaking up all this volume? I'm taking a big punt that there is some serious positioning going on. That was my reason to jump in, but way too early ($1.36). I'm sure there's a lot of day traders though, that have made big $$$ in the past couple of weeks with CNP - Wildly volatile swings and big volumes, but little comfort for people who bought in @ $6 - $10


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## UPKA (3 January 2008)

mrWoodo said:


> Good to hear, Onecap! The sheer amount of volume over the past week cannot be attributed to mum and dad traders + day traders.
> 
> The last few substantial shareholder notices released :
> 
> ...




Interesting to see CBA reduce its holdings, since colonial was the one that first wanted to get into it when CNP declared its problems. I think people who are buy are your average mum and dad investors, the big players will have a clearer picture of how hard it is for CNP to get funding atm...


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## Miner (4 January 2008)

Friends
I am referring to an eminent expert : Mr Robert Gottliebsen an ex editor of a financial daily has moved into columnist in Eureka REport. In this famous journal he has chosen few shares to create a portfolio on hypothetical basis and created $10000 in each of the shares. Consistently he advocated for CNP even when it started into slide. There was no sale ever or warning.
Most of his (75%) of his portfolio has been downgraded far below than original investment value.
One would expect that these experts would know better than day traders or naive mum and dads. That is the irony. Many of the financial analysts are like him - too knowledgable. When real crunch time comes their analysis (??) falls flat to withstand the test. By sheer backing of a high fund and getting prioritised backing of seed money, promoters'quota and financial muscles the analysts are giving returns. When it is sunshine every one can make a hey. Test comes when there is a problem. 
If any one would have followed Mr Gottliebsen's recommendation would been bankrupt.
So lesson learnt is DYOR. NO one would take more care for your money than yourself. Planner gets 2.5% of your investment (with no risk) you have the probability to loose rest 97.5% of the advice becomes nonfinancially viable.

Bottom line CNP is in great trouble but still just because CBA and other financial institutions are shied away could be the right time to invest by those who dare.

This is not a financial advice but sharing some observation .

REgards


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## godzillaismad (4 January 2008)

Well, how much will this stock drop next week after its profit warning, which was issued after today's close of trade?


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## Nathan_b (4 January 2008)

re read the announcement, they are not affected to 2010 in us loans which is about 40%, and the aussie component isnt due till 2014 i think and thats 50% of their debt.

il get back to you on monday night with my thoughts on what will happen with SP


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## ROE (5 January 2008)

Hedge fund managers and many big time trades make calculated moves every day ... buying into CNP in large quality is nothing surprising ...

It doesn't mean this stock is cheap or good .They all have their reasons and buying into something just because you see other buy in without much knowledge about the product is risky.

Just as they are people who make millions from trading forex and many more goes backward or even bankrupt, same goes for the stock trading.

what about those guys that buy big into CNP when they are trading above $5  ... they make a calculated move and they got it wrong... Now they are licking the wounds .. they do the same now at $1 ish ...it could go up to $2 or $3 who knows but it has the possibility of going south as well..


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## ROE (5 January 2008)

Another Calculated move that could go wrong again 

http://business.theage.com.au/centro-shocks-the-market-with-two-more-bombshells/20080104-1k8i.html


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## runningrugby (5 January 2008)

ROE said:


> Another Calculated move that could go wrong again
> 
> http://business.theage.com.au/centro-shocks-the-market-with-two-more-bombshells/20080104-1k8i.html




Sounds like CNP has gone from a mild cold to having a severe case
of Phenomia and also Lung Hematoma in the space of a couple of days.
With the Dow Jones down over 200 points and the directors once again choosing to put out an announcement after the close its hardly suprising that the financial controller is on stress leave. I read the paper this morning and they didn't seem to know when he was coming back?? Who would come back to that job..


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## godzillaismad (5 January 2008)

Gosh, what will make Monday a very interesting day for CNP indeed. Wonder whether it will retest its recent low of 42 cents. It couldn't get any worst, could it?


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## dotanz (5 January 2008)

Media painted the hedging thing far too big. It only happens in next 4 - 6 years time. NOW we are talking about a situation for the next couple of months!

What are the newspapers thinking of?


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## nitpra (6 January 2008)

I saw this in sky news last Friday (4/1/08):
"The embattled Centro Properties Group, has issued a warning to the markets, saying earnings may be driven down even further because of the rise of interest rates.

It says its current interest rate hedging is now below historical levels meaning its increased exposure to interest rate movements could translate into volatility in earnings.

Centro says it traditionally maintained a high level of fixed interest rate hedges on its borrowings, but because of the credit crunch its unable to extend maturing interest rate hedges."


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## Quixis (6 January 2008)

nitpra said:


> I saw this in sky news last Friday (4/1/08):
> "The embattled Centro Properties Group, has issued a warning to the markets, saying earnings may be driven down even further because of the rise of interest rates."




Expect Centro to be dragged like a Golly Wog between two sisters for the next 7 weeks.

And seriously. Look at the divvy payments over the past years. It's around 43 cents. Correct me if I'm wrong please.

Now I read divs will fall by 28% by 2010. So we have a $1 share returning what ... 30 cents? Not a bad ROI is it.


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## Quixis (6 January 2008)

dotanz said:


> Media painted the hedging thing far too big. It only happens in next 4 - 6 years time. NOW we are talking about a situation for the next couple of months!
> 
> What are the newspapers thinking of?




Mate journalists are retards. Pure and simple. Instead of stating the facts they sensationalise everything thinking it's better to read.

I loved this one by some West Australian turkey. "Centro's shares dropped a further 23% on their way to zero."

"To zero!" Totally unfounded and pure bull**** creativity which needs to stay in children's books and not financial publications. Oh and I'd happily tell this wanker straight to his face.


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## vishalt (6 January 2008)

Quixis said:


> Mate journalists are retards. Pure and simple. Instead of stating the facts they sensationalise everything thinking it's better to read.
> 
> I loved this one by some West Australian turkey. "Centro's shares dropped a further 23% on their way to zero."
> 
> "To zero!" Totally unfounded and pure bull**** creativity which needs to stay in children's books and not financial publications. Oh and I'd happily tell this wanker straight to his face.



Ehhh I wouldn't go that far, that's what you get when you read news from smh or Daily Telegraph or any of those rubbish fairfax/news ltd newspapers, they're overly-opinionated. 

Go to something like Bloomberg.com and read the Centro stories and I think you'll find much more objectivity.


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## krisbarry (6 January 2008)

Well I have to say it, Monday looks very ugly for CNP, given the dreaded 4pm announcement, and the drop on Wall Street.

Should be pretty easy to pick CNP up for under $1 come Monday morning


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## Aussie2Aussie (7 January 2008)

Stop_the_clock said:


> Well I have to say it, Monday looks very ugly for CNP, given the dreaded 4pm announcement, and the drop on Wall Street.
> 
> Should be pretty easy to pick CNP up for under $1 come Monday morning





Why would you want to, with debt at $3.00 per share and an inability to refinance + possibilty of a trading halt at any time.


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## Fed23 (7 January 2008)

Very surprised by this stock today. I thought I would get beaten down heavy yet it's lowest was 106 and it's managed to rally back up to 120ish.


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## dotanz (7 January 2008)

It's very interesting to see CNP holding up strongly today, even under stupid media report/abuse over the hedging issue and the run down in general market. It means that Mr. Market agreed the value of the stock.

Can't wait to see the end result in a month's time.


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## Singh (9 January 2008)

Centro Properties Group (CNP AU), the shopping mall owner that put itself up for sale after struggling to refinance debt, increased 2.5 cents, or 2.1 percent, to A$1.23. Oaktree Capital Management LLC, a Los Angeles-based private equity fund with $51 billion in assets, is a potential buyer for stakes in Centro's malls, the Australian Financial Review said, without citing where it got the information. Oaktree joins Blackstone Group LP in ``expressing interest'' in Centro's some A$2.3 billion ($2 billion) in assets, the Review said. 

Source:- http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aldOaTb0uGm8


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## Nathan_b (10 January 2008)

these things are falling and falling today....

no announcement either... is this calm before the storm? it looks like a stopwatch at moment the digits just trickling backwards.

think i will buy some more...


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## tronic72 (10 January 2008)

Nathan_b said:


> these things are falling and falling today....
> 
> no announcement either... is this calm before the storm? it looks like a stopwatch at moment the digits just trickling backwards.
> 
> think i will buy some more...




Just got some at .88 Gotta be in it win (or loose it). This time tomorrow I'll either be laughing or crying.

Did you get any Nathan?


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## mime (10 January 2008)

I was looking at it's PE ratio and it's something like 2. How badly has the events in the US affected this stock? Is it a major bargain or a major loser?


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## tronic72 (10 January 2008)

mime said:


> I was looking at it's PE ratio and it's something like 2. How badly has the events in the US affected this stock? Is it a major bargain or a major loser?




If they pull it off, ajor, major bargain! If they don't then you may as well spend your money at the Pub.


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## leongu (10 January 2008)

1139 [Dow Jones] Centro Properties (CNP.AU) slips as much as 23% after newspaper report that a CNP executive met with Australia's securities regulator. The Australian newspaper Thursday cites a journalist in lobby of ASIC office who overheard a lawyer advising the executive and speculates the regulator may be investigating CNP's failure to account for more than A$1 billion of debt in its FY07 accounts. An ASIC spokeswoman declined to comment, while a CNP spokesman said he was preparing a statement. Shares in CNP, which is struggling to refinance A$3.9 billion in debt, have dropped 93% since Dec. 17 when it informed the market. CNP last trade down 16% to 94 cents, Centro Retail (CER.AU), a property trust managed by CNP, down 12% to 68. (ABH)


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## wilko66 (10 January 2008)

...strange huh?  We already knew the board would get looked at.  What a day.  I can't see that it's material though.  Don't we either take a view on the net-value of the co in the event they fall over (knowing access to any return will be long and painful) or we take the view they'll survive?


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## Fed23 (10 January 2008)

I'll surely be watching this first thing tomorrow. If the market opens down tomorrow I could see this running a lot more, maybe into the 60cent range.


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## UPKA (10 January 2008)

tronic72 said:


> If they pull it off, ajor, major bargain! If they don't then you may as well spend your money at the Pub.




chances r, after ASIC there will be a class action law sue against them, it'll be a real tough one for CNP to ride out... Good luck to all holders.


----------



## LetsGoBroncos (10 January 2008)

If investors no matter how big or small were involved, do they have to keep their holding until the end of the court case to be part of it or would just being a investor at the time of the fallout be enough? Class action suits are new to me.


----------



## stockwhizben (10 January 2008)

In addition to letsgobroncos question, would a class action cover all investors holding stock recently or just the ones that bought stock from the time the first financial statements were released until they were amended - the loans current versus non-current issue (amended without notice given)


----------



## anthony malone (11 January 2008)

Trading Halt, any thoughts?? A mate dropped 10k into these yesterday arvo... I'm thinking either good news or bad news will be heard soon...


----------



## benwex (11 January 2008)

Ok so CNP has just gone into a trading halt till the 15th..

This is quite possibly the next chapter, the asset value of CNP is around $3.50 per share so I am hoping for some serious premium to the current price for any offer or strategic break up..

The only downer for me was the nasty sell off yesterday for no apparent reason other than the actions of a leaky market??

Who else is on this punt???

fortune favours the brave!

benwex


----------



## ROE (11 January 2008)

Trading halt.. wonder whether it's good news or bad ... this announcement could make or break centro 

Feel like gambling at the casino don't know what card centro gets next


----------



## ROE (11 January 2008)

benwex said:


> Ok so CNP has just gone into a trading halt till the 15th..
> 
> This is quite possibly the next chapter, the asset value of CNP is around $3.50 per share so I am hoping for some serious premium to the current price for any offer or strategic break up..
> 
> ...




No one knows the exact asset value of this stock since the whole debt thing goes up in the air.... that valuation is based on some crazy premium, try value it again today against the debt you wont get any where near that amount.

this is not a brave move, it's a gambling move since no one knows the valuation of the stock


----------



## doctorj (11 January 2008)

Ahhh the old trading halt over the weekend trick.  For those that don't know, you can only be halted for 3 days without going into suspension (which is a bad thing) so taking a halt over a weekend gives you 2 extra days to sort your stuff out.

My money is on a T/O offer or an offer for some of their better assets.


----------



## Fed23 (11 January 2008)

I would hate to be in this stituation. I wouldnt be able to sleep until the 15th.

I do hope good news comes out but I dont think you would get anything more than $2 a share at it's best. Everyone knows this company is down and out so they will snap up malls for cheap.


----------



## TheRage (11 January 2008)

Maybe the trading halt relates to their ACCC dealings, or maybe to their ability to refinance or maybe.....

Too many maybe's for me. Good luck to anyone holding I hope you don't get burnt.


----------



## zebop (11 January 2008)

Heard on Fox this morning that halt MAY have something to do with MFS funding management. Possibly taking over as responsible entity for 35 of unlisted closed end Centro property syndicates ? 
Maybe this is a turn around...not sure?


----------



## adobee (11 January 2008)

I heard that there are two equity offers on the table from american companies for CNP, and this should equate to positive news..


----------



## UPKA (11 January 2008)

adobee said:


> I heard that there are two equity offers on the table from american companies for CNP, and this should equate to positive news..




if the offer is good, what if CNP is selling off its assets at basement price...? I think the market is waiting for a true valuation on the company, so any bid would clear out the uncertainty a bit more..


----------



## Broadside (11 January 2008)

doctorj said:


> Ahhh the old trading halt over the weekend trick.  For those that don't know, you can only be halted for 3 days without going into suspension (which is a bad thing) so taking a halt over a weekend gives you 2 extra days to sort your stuff out.
> 
> My money is on a T/O offer or an offer for some of their better assets.




the freefall yesterday has me leaning towards bad news rather than good, I sold out of my small position yesterday accordingly.


----------



## Go Nuke (11 January 2008)

Yes it does usualy seem that "the market _knows_" and if there was a sell off then perhaps it is bad news.

On the other hand, like myself the trading halt over the weekend like this would give me a coronary with the volitility of CNP.

What is it they say...money invested is money you can afford to lose?

Too risky for me, but goodluck to those that hold!


----------



## adobee (11 January 2008)

adobee said:


> I heard that there are two equity offers on the table from american companies for CNP, and this should equate to positive news..




I am only running of rumours of what people have heard.. but yesterday I heard that CNP had been talking with administrators thus the large decline in share price as some people who got the leak got out.. Then today I am told they have two equity offers from american companies..  I have just been told that this was also reported on abc radio about an hour ago by a college who went out to an appointment and had the radio on in the car..

I cant confirm it and it is rumour.. but if on abc radio it may have some merit..


----------



## ROE (11 January 2008)

adobee said:


> I am only running of rumours of what people have heard.. but yesterday I heard that CNP had been talking with administrators thus the large decline in share price as some people who got the leak got out.. Then today I am told they have two equity offers from american companies..  I have just been told that this was also reported on abc radio about an hour ago by a college who went out to an appointment and had the radio on in the car..
> 
> I cant confirm it and it is rumour.. but if on abc radio it may have some merit..




History told me, when you take trading halt over the weekend it usually bad news..if it's good news it usually done during the week and they take it out for a day or 2


----------



## reece55 (11 January 2008)

zebop said:


> Heard on Fox this morning that halt MAY have something to do with MFS funding management. Possibly taking over as responsible entity for 35 of unlisted closed end Centro property syndicates ?
> Maybe this is a turn around...not sure?




See MFS announcement - they have confirmed that they are looking at doing this.......
*****
CENTRO UNLISTED PROPERTY SYNDICATES - INDEPENDANT RESPONSIBLE
ENTITY PROPOSAL
In light of general market speculation yesterday, and media reporting today, MFS affirms
it has made a specific proposal to a range of Centro entities for an MFS entity to
become the independent Responsible Entity only of approximately 35 unlisted closed
end Centro property syndicates. MFS has on a number of occasions previously taken
such an appointment as a new Responsible Entity in similar circumstances. The
proposal only relates to a potential role as an independent Responsible Entity and does
not relate to any real estate acquisitions from the Centro group. MFS does not intend
to comment further on such proposal at this time.
*************

Cheers
Reece


----------



## Judd (11 January 2008)

All I can say is that one of our listed managed funds (AFI) unloaded all of its CNP holdings.  At July 07 its CNP holdings were valued at $27M and by 31/12 got rid of the lot for $18.7M. May have known something as they have been holding Centro in its various guises for over 5 years.

I find it strange that people consider shares very risky and yet property is absolutely safe.  Where there is poor management and/or large amounts of debt involved nothing is sure or safe.

For those retails holders (including retirees) in CNP who put money into these "defensive" investments to obtain an income stream, they must be worried and, sadly, I think the reality will be that they have done their dough.


----------



## Bushman (11 January 2008)

reece55 said:


> See MFS announcement - they have confirmed that they are looking at doing this.......
> *****
> CENTRO UNLISTED PROPERTY SYNDICATES - INDEPENDANT RESPONSIBLE
> ENTITY PROPOSAL
> ...




Interesting - I am assuming that it is all the Australian and New Zealand syndicates that were originally bought from MCS. Syndicates vehicles 37 and 38 created post merger have strong US property interests. 

There is also likely to be the sale of the unlisted Australian Wholesale Fund - CAWF. This entity owns the plum Aussie assets including Bankstown, Roselands, Colonaddes and the like. A-grade retail properties. 

The halt has also extended to CER so it could also be the announcement of an equity or JV partner.

Anyway we will all know next week.


----------



## The Mint Man (11 January 2008)

anthony malone said:


> Trading Halt, any thoughts?? A mate dropped 10k into these yesterday arvo... I'm thinking either good news or bad news will be heard soon...



One of my workmates (and his father) was considering doing almost exactly the same thing, all be it after the 'dead cat bounce'. I advised against it but not sure if he took that advise.


----------



## tronic72 (11 January 2008)

I have a question...

If it was bad news, wouldn't the company wait until the 11th hour to give it? At this time the company still have over one month to broker a deal.

Just putting it out there.


----------



## Julia (11 January 2008)

reece55 said:


> See MFS announcement - they have confirmed that they are looking at doing this.......
> *****
> CENTRO UNLISTED PROPERTY SYNDICATES - INDEPENDANT RESPONSIBLE
> ENTITY PROPOSAL
> ...



This announcement from the company doesn't seem to have impressed MFS shareholders too much:  MFS down nearly 10% today.


----------



## stockwhizben (12 January 2008)

Article in sydney morning herald for those interested
Im from melb and checked The Age and not in there. Not sure if in any other Melb papers so here's link

http://business.smh.com.au/beam-me-down-please-scottie/20080111-1lia.html


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## shinobi346 (12 January 2008)

CENTRO looks poised to reject Gold Coast-based MFS's bid 
http://www.news.com.au/couriermail/story/0,23739,23040759-3122,00.html

I'm glad I got out of this one. Before the halt Centro was trading at 86 ¢ and CER at 58.5 ¢.


----------



## Doris (12 January 2008)

shinobi346 said:


> CENTRO looks poised to reject Gold Coast-based MFS's bid
> http://www.news.com.au/couriermail/story/0,23739,23040759-3122,00.html
> 
> I'm glad I got out of this one. Before the halt Centro was trading at 86 ¢ and CER at 58.5 ¢.




Am I going senile?   I don't recall Andrew Peacock ever being PM!  

Quoted from Courier Mail site above:

MFS, chaired by former prime minister Andrew Peacock, told the ASX it had "made a specific proposal" to become the manager of "approximately 35" of Centro's property syndicates.


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## shinobi346 (13 January 2008)

The highest Peacock has ever been is federal leader of the Liberal party in opposition. The person who wrote that article mustn't have been around at that time to made a mistake like that.


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## Alistair (14 January 2008)

Over the last couple of weeks I've accumulated 15,000 shares in Centro at an avg of $1.04.
After the trading halt on Friday I've been sweating bullets (along with a few others so I see!!)
What's the general concensus on this one - is it likely to be good news?!
I know it will be mere speculation, but I'm curious what some people with a bit more experience think! 

In this sort of situation are we likely to see an announcement today or will they drag it out until they're forced to resume trading tomorrow - for better or for worse.


----------



## ROE (14 January 2008)

D-Day Approach for Centro
http://www.aireview.com.au/index.php?act=view&catid=8&id=7642&setSub=1

I followed my rules this time and didn't get involved and didn't get burned


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## oldblue (14 January 2008)

OK, I admit I took a bit of this at "bargain" prices.

Don't like the look of it now but anything could still happen.


----------



## chicken8 (14 January 2008)

centro has something like 670 shopping centers in the US

whereas westfields only has 45 or so

very different strategies from their management

and with andrew scott being one of only a few people who understands the company's strategy you'd wonder what will happen to centro when he gets the boot


----------



## Go Nuke (14 January 2008)

Well looking at Commsec *now* there are 93 people (790,430K of shares) wanting to buy Centro for $1.30.

Does that mean these people think that is a fair value based on *their* research?

Or perhaps they are lemmings?


----------



## tronic72 (14 January 2008)

"Well looking at Commsec *now* there are 93 people (790,430K of shares) wanting to buy Centro for $1.30.

Does that mean these people think that is a fair value based on *their* research?

Or perhaps they are lemmings?"

Power Etrade has the same. I don't quite understand why those numbers are there. 

Everyone is predicting bad news but no one is saying what it is. As I posted earlier, wouldn't they use all the time they had to attempt a "Lazarus" in which case why would the news be bad. Just putting it out there.


----------



## reece55 (14 January 2008)

Go Nuke said:


> Well looking at Commsec *now* there are 93 people (790,430K of shares) wanting to buy Centro for $1.30.
> 
> Does that mean these people think that is a fair value based on *their* research?
> 
> Or perhaps they are lemmings?




Guys
It doesn't matter - as soon as it comes out of trading halt (or stays in suspension because the have gone kaput), all of the orders will be flushed from the system - you should completely ignore it, because the buy/sell data is now useless......

Cheers
Reece


----------



## vishalt (14 January 2008)

Alistair said:


> Over the last couple of weeks I've accumulated 15,000 shares in Centro at an avg of $1.04.
> After the trading halt on Friday I've been sweating bullets (along with a few others so I see!!)
> .



Why would you be sweating? 

You took on a massive gamble, if anything you should laugh it off if you even thought about talking such a risk...


----------



## 3MT (14 January 2008)

[Dow Jones] Centro Properties (CNP.AU), whose stock is in a trading halt pending an announcement, may sell stock through a rights offer to bolster its balance sheet, the Australian Financial Review reports. A review by Centro adviser Lazard Carnegie Wylie may lead to a rights offer because CNP's banks want an infusion of new capital as a condition of any refinancing of A$3.9 billion of debt maturing by Feb. 15. Unnamed sources told the AFR the share sale might face a number of challenges, such as finding a cornerstone investor and an underwriter to lend confidence to the process. CNP has fallen 85% to 86 cents since Dec. 17 when it told the market about its situation, while Centro Retail (CER.AU), a property trust managed by CNP, has dropped 59% to 59 cents. CNP may update the market as early as today, AFR says, without saying where it got the information.


----------



## nioka (14 January 2008)

reece55 said:


> Guys
> It doesn't matter - as soon as it comes out of trading halt (or stays in suspension because the have gone kaput), all of the orders will be flushed from the system - you should completely ignore it, because the buy/sell data is now useless......
> 
> Cheers
> Reece



 Aren't the orders only flushed when there is a suspension. CNP is only in a trading halt at this stage. If the trading halt is lifted then the orders will be filled. Check this out for yourself.


----------



## Kauri (14 January 2008)

Punters often position themselves at the head of the que pending an ann. Before the halt is lifted you get 10-15 mins to decipher the ann, if it is good you are in front of the mob, if it is bad you pull the order.... standard dark-side trading.....
Cheers
...........Kauri


----------



## nioka (14 January 2008)

Kauri said:


> Punters often position themselves at the head of the que pending an ann. Before the halt is lifted you get 10-15 mins to decipher the ann, if it is good you are in front of the mob, if it is bad you pull the order.... standard dark-side trading.....
> Cheers
> ...........Kauri



 That assumes you know about the announcement when it is made and not a minute after trading has recommenced. Unless you have announcement alerts which are reliable you can get caught. Some brokers are sometimes hours late in posting announcements. The window is minutes and it can happen in a coffee break.


----------



## Kauri (14 January 2008)

nioka said:


> That assumes you know about the announcement when it is made and not a minute after trading has recommenced. Unless you have announcement alerts which are reliable you can get caught. Some brokers are sometimes hours late in posting announcements. The window is minutes and it can happen in a coffee break.




All too true.... but if you treat your trading as a business you have the tools and the.... etc... have known a few people who make their living from just that style of trading.... watch the anns, particularly the small miners who go off for 15 mins on an assay/drill result type ann. check out the depth during the halt.. interesting stuff..
Cheers
..........Kauri


----------



## reece55 (14 January 2008)

nioka said:


> Aren't the orders only flushed when there is a suspension. CNP is only in a trading halt at this stage. If the trading halt is lifted then the orders will be filled. Check this out for yourself.




Yep, actually you are right Nioka....... my apologies here....

However, as Kauri says, probably not too reliable as there will be a rapid reshuffle in the pre open......

Cheers
Reece


----------



## Fresh1977 (14 January 2008)

On the stock quote that I am looking at it says the majority of buyers are offering between 0.865 to 1.00 and sellers 0.38 to 0.58.  I'm not sure I exactly understand why this would be.  As my name suggests, I am fairly fresh to all of this.  Can anyone explain why the above may be??


----------



## ROE (15 January 2008)

What the hell? they put a trading halt over the weekend to announce new CEO?
hmm something very fishy going on with this stock.


----------



## ROE (15 January 2008)

Fresh1977 said:


> On the stock quote that I am looking at it says the majority of buyers are offering between 0.865 to 1.00 and sellers 0.38 to 0.58.  I'm not sure I exactly understand why this would be.  As my name suggests, I am fairly fresh to all of this.  Can anyone explain why the above may be??




That bid and offer ... sellers want to sell for 86 to 100 cents
buyer only want to buy 38 to 58 cents..in the buyer eyes this stock isnt worth above those price


----------



## Fed23 (15 January 2008)

I was expecting more news on the ASX then just a new CEO. I was thinking it would annouce its plans for meeting the deadline in Feb


----------



## Bushman (15 January 2008)

Fed23 said:


> I was expecting more news on the ASX then just a new CEO. I was thinking it would annouce its plans for meeting the deadline in Feb




What do you mean? 

There are two announcements - one announcing Glenn Rufrano as the new CEO and one dealing with potential default of US noteholders, forex hedging and further earnings volatility, sale of CAWF/CAF and disclosure of debt in the stat accounts. 

A few extra bombshells in there. Have another look.


----------



## Fed23 (15 January 2008)

Did anyone buy into this at it's low 44cents? Its now back to 71Cent.... I cant believe how fast its sky rocketed


----------



## ROE (15 January 2008)

I only see the CEO announcement when I check, the second announcement must have come after I check  doh look like it wont be going back up any time soon


----------



## Alistair (15 January 2008)

vishalt, 
I didn't borrow to buy these, and the majority of my invested funds are in "safer" stocks, so to a certain extent you're right.
But I'd still call it a non trivial amount of cash and I would be.. er.. saddened to see it dwindle to nothing!
As you said - it's a gamble! 

Anyway, moving forwards..  should we start taking bets on which way it will go now?

I'm fighting the part of me that wants to follow the crowd and sell out now to cut my losses.
Kicking the part of me that wants to buy more now because it's "cheap" - already invested(gambled?) in this stock as far as I'm willing.
Ideally I'd like to sell for at least the price I bought in at, and learn a bit more before jumping on such volatile stocks in the future (I picked a shocking time for a beginner to get into shares by the looks of it!)

From what I can see from the company press releases, hyped up media and general conceusus on here it could still go either way..


----------



## Kauri (15 January 2008)

Just something I do if I am ever tempted to bottom pick a falling machete... if I owned these would I be rushing to sell...
Cheers
..........Kauri


----------



## ROE (15 January 2008)

Remember law suit could follow for share holders who bought in before the crash IF this stock recover due to Centro understate its liability.


----------



## doctorj (15 January 2008)

I wouldn't be placing too much reliance on any class action - it's a very long road.  Take a look at SOG.  That's been ongoing for 4 years or so now and is still a very long way from a resolution.


----------



## mime (15 January 2008)

So does anyone know what kind of cash flow of this company has or will have? I am very confident the US economy wont go into recession because of future monetary policy from their CB. This stock could be a major boom provided the sub prime incident hasn't evaporated this companies potential for future profits.


----------



## rub92me (15 January 2008)

mime said:


> So does anyone know what kind of cash flow of this company has or will have? I am very confident the US economy wont go into recession because of future monetary policy from their CB. This stock could be a major boom provided the sub prime incident hasn't evaporated this companies potential for future profits.



It has to survive first before it can have a cash flow. If it can't refinance there will be a firesale. Some nasty rumours about disclosure as well. And even if the US doesn't go into a recession, I don't think we've seen the worst there yet either.


----------



## mikat (15 January 2008)

the only problem this stock seems to have is its inability to refinance debt.
it has over 90 % occupancy for its tenants, which in australia include coles and woolworths, so it has good cash flow. its just overgeared, and has been caught out by the lack of liquidity in the lending market.

it would be risky, but i think it would be worth  putting a few dollars in about now, . i cant se how it could go any lower, and at CNP only .60 an CER at .38 a few cents up could mean some big gains.


the big banks are the unsecured creditors as well for about 3.5 billion, so i couldnt see them let it fall over.

i wouldnt be surprised to see a buy out by westfield or macqaurie


----------



## Alistair (16 January 2008)

Sitting on low 50's today. Just keeps getting worse and worse!
With a market cap of only 500M now, are investors valuing this as a long shot gamble and nothing more?
To my knowledge their assets far, far exceed this number. Surely there is still money to be made for their financiers, and they'll only lose money if they force a fire sale. WTF?
Note to self.. commence degree in economics ASAP.

At the moment I'm sitting on approx 50% loss, I figure that it's worth taking the gamble given the amount of money already lost.
Any estimates on a rebound figure should the beast NOT be destroyed utterly? I'd be thinking $0.90 - $2 range...?


----------



## ROE (16 January 2008)

If you read on most of the paper on CNP, most experts pretty much come to a conclusion if there is a fire sale for this stock, there isn't any value left for share holders.

There is an article on AFR over the weekend, that put this stock on -ve share value in one scenario that could happen.


----------



## 9krpm (17 January 2008)

Hi guys,

I've been fascinated by the Centro story since "the big fall". I've read a lot of articles about Centro but most are just uninformed negative commentary and speculation with hardly any real ANALYSIS. Typically this leads to massive overreaction by the market.

For my money, the key is how solid is the $26.6B asset valuation vs. the known $18B debt. Even if those figures are a bit rubbery and they have to sell off some assets at a discount to meet their $1.9B immediate debt (there seems a lot of confusion about this too??? many say $3.9B but I don't think that all falls due in Feb?) That still leaves a fair bit of shareholder equity.

Can someone explain where I'm wrong on this please. It's driving me nuts!

9k


----------



## doctorj (18 January 2008)

I think the real risk in Centro, is not so much the debt, but the valuation of the US properties.  There is a large risk the US assets are materially overstated and the short fall could result in liabilities>assets in a forced sale scenario.


----------



## ROE (18 January 2008)

9krpm said:


> Hi guys,
> 
> I've been fascinated by the Centro story since "the big fall". I've read a lot of articles about Centro but most are just uninformed negative commentary and speculation with hardly any real ANALYSIS. Typically this leads to massive overreaction by the market.
> 
> ...




Pretty easy to calculate based on those figure
18B debt
26B asset (based on inflated price and valuation)

come fire sale take at least 30% off the valuation in some case more
that leave it with 26B - 7.8B = 18.2B

What is left for share holder?? Nothing zippo.


----------



## 9krpm (18 January 2008)

Yeah, that's great BUT they don't have to sell everything to cover 1.9B or even 3.9B debt - do they? And what they pay off, they no longer owe.

Also if they are only selling some assets, they would be silly to sell the ones that they will have to discount the most, however lets say they sell 7.8B of book to cover 3.9B (i.e. 50% of current value  - Mega Fire sale prices)

We now have (26,6 - 7.8) - (18 - 3.9) = 4.7  Yeah?


----------



## doctorj (18 January 2008)

9krpm said:


> Yeah, that's great BUT they don't have to sell everything to cover 1.9B or even 3.9B debt



There lies the problem - the market doesn't know how much of their assets they'll have to sell to cover the debt position.  Also, I would hope they wouldn't sell of their good properties to hold their position in the crappy ones.  Wouldn't be a lot of point would there?


----------



## Miner (18 January 2008)

An extract from Eureka Report.
It is ironical that in the same magazine Robert G has strongly recommended to buy CNP when it was $12 and only it was three months ago.
So read with care and research carefully.

*Centro: The warnings we all missed 
By Robert Gottliebsen   



PORTFOLIO POINT: The Centro collapse offers two clear lessons: beware complexity, and investments you don’t understand. 


What is amazing about the Centro collapse and the Citicorp writedowns is that, with the benefit of hindsight, both companies made the same mistakes that have caused countless corporate downfalls in recent decades. And in each case there were clues to the looming demise that we did not pick up. 

So let’s look at what we can learn from each situation and apply it to the future. In the case of Centro, what fooled me, the directors, the banks and the superannuation fund managers was that, unlike so many previous crashes, the underlying assets were well-managed (shopping centres) with high cash generation. 

In the US, these centres represented a fantastic hedge against any recession because the American economy would have to sink very low before food retailing was affected. 

But Centro and Citicorp shared a common flaw that has wrecked so many companies: they had complex asset ownership structures that masked basic problems from not only shareholders but management and directors. 

In the case of Centro, the basic structure was complex and assets were owned in different levels with different stakeholders, and studded around these complex structures were joint ventures. It was a reporting nightmare. In the case of Citicorp and many other banks, including Merrill Lynch, they were selling off loans to illiquid structured investment vehicles (SIVs) forcing the banks to buy back the paper. Australian banks’ securitsation structures have access to liquidity but have not been tested by major defaults. Citicorp operated across the globe in a vast number of sectors and reflected the genius of former chief executive Sandy Weill. Successors often have difficulty managing such organisations. 

Unlike Centro, Citicorp and Merrill Lynch made a mistake that often hits companies: they simply didn’t look at the underlying asset behind the revenue generation. Instead, they gained solace from the fact that “everyone was doing it”. Sub-prime loans were being generated by mortgage dealers and had not the slightest chance of being repaid under the terms set out. 

What’s significant is that in the 1970s, Citicorp and the other leading US banks did exactly the same thing, but instead of lending to US residents who could not pay they lent to impoverished countries that also had not the slightest chance of repaying. In three decades all corporate memory had been erased. 

Yet the combination of complex structures and assets of dubious worth caused the Enron collapse and has been a characteristic of bad bank lending in many Australian property booms. 

It is always difficult for shareholders to determine that a lending asset class is flawed but one would have thought that the broader US investment community would have had the resources to do the work. 

Nevertheless, we have two clear lessons: beware of complex joint venture structures and don’t invest in companies unless you are very clear how they make their money. 



The Centro collapse was triggered by another feature of past collapses: massive over-borrowing. Yet when you looked at the group’s presentations for the year to June 30, 2007, borrowing seemed to be under control. However, with hindsight there was a clue that we all should have picked up. The gearing of Centro Properties on a so-called “look through” basis (which incorporate joint ventures) rose from 26% to 48% and the asset backing for the shares fell from $3.63 to $2.29. The company had explanations for these events, which obscured the fact that Centro was exceeding its own borrowing guidelines and had done so very quickly. It was a clear warning signal. 

But there was a third clue that we all should have picked up. No company should ever undertake more than one large expansion at a time. I will never forget BHP being pushed to the edge of collapse in the 1990s when it undertook two huge projects – Magma Copper and the WA hot briquetted iron plan – that were both disasters. Centro undertook three big international acquisitions and doubled its funds under management in one year. At the same time it undertook a major time-consuming internal structural merger. That sort of expansion and internal reorganisation requires everything to go right. Many Australian and international companies have simply collapsed under the management strain of over-expansion. When it is based on borrowed money and a complex ownership structure it is a lethal cocktail. 

Of course these are hindsight judgements, which in the case of Centro were obscured by the basic soundness of the business. Although sub-prime fallout triggered Centro’s collapse, slower growth would have enabled management to focus on the vulnerability of the group. 

An obvious structural weakness for Centro was that one of the layers of ownership held two unlisted property trusts where superannuation funds could withdraw money, very similar to the unlisted property trusts that collapsed the last downturn. For years superannuation funds had been hosing money into these two funds so it seemed inconceivable that a run might develop. The original plan was that if there was a run, the holding company (Centro Properties) would inject the extra money. And in past years it could have done that, but at the time of crisis Centro Properties was highly leveraged and it simply wasn’t possible. 

What is amazing is that three of Australia’s big four banks lent Centro Properties most of its $3.5 billion unsecured loans. What this shows us is that, like Citicorp, some of our bankers have forgotten the lessons of history. It is ironic that if there had been a little bit of old-fashioned corporate conservatism among our big banks it might have just triggered an alert on the Centro board, which would have saved the company given the quality of its assets. Australian bank shares have fallen sharply, partly in line with all other global banks. 

This has confused a lot of Australian stockbrokers, who point out that Australian banks don’t have the sub-prime exposure of Citicorp. Centro and loans to the US Countrywide group are danger signs. But the Australian banks have two other structural problems that are similar to Citicorp and Merrill Lynch. 

First, while the Australian banks’ lending quality may be better than Citicorp, Australian banks are very dependent on overseas borrowings and on the workings of the derivative market, which converts US dollar borrowings to Australian currency. The cost of those loans has already risen and could rise further. Given the attitude of the Australian Government, there will be great pressure for the banks to not pass on these extra costs. 



Citicorp also depends on the wholesale funding market. The US Federal Reserve is flooding the American banks with money so that they can continue to maintain customer lending in the face of a wholesale market that has contracted and become more costly. The second weakness Australian banks share with Citicorp is that mindless government regulations have turned bank board meetings into useless box-ticking exercises to comply with so-called “corporate governance”. Most of it is a waste of time and after directors have gone through a day or so of this soul-destroying useless activity there is grave danger that they will not spend enough quality time looking at the base strategies of the business. 

I am sure this contributed to Citicorp and other US bank boards not focusing on the stupidity of the sub-prime circus. Australian banks’ regulation is not as bad and they are not as complex but mindless regulation makes them potentially vulnerable. 

Investors should realise that there are a few more nasties to come out of the US and it is this fear of the unknown that pushes the market down day by day. For example, “monoline” insurance companies have insured $US2.3 trillion worth of loan risk, including about $US600 billion in vulnerable US assets. Some of the insurance companies are simply not in a position to stand anything more than token claims and have been as silly as the sub-prime banks. Yet vast sums have been lent on the basis that these insurance guarantees accord triple-A ratings to dubious paper. 

In addition, there is a commercial property crisis in the UK and S&P 500 companies have $US2 trillion in goodwill, which will create more big writeoffs in the US downturn. The real problem is that we went for so long in the good times that we forgot the lessons from the past.   *


----------



## Miner (18 January 2008)

One more report from Eureka Report on Centro

*No, it’s not a bargain *By Quan Gan   



_*PORTFOLIO POINT: Even with a price/earnings multiple of 0.1, Centro is a stock investors should treat very cautiously. 


Dropping from about $10 per share before Christmas to less than 50 ¢ today (January 18) Centro Properties is a classic example of rapid growth followed by sharp collapse. 

Does its low price mean the stock is a buy? My answer is no. 

Recent share transaction records show institutional investors such as UBS and Barclays are selling. That should have retail investors asking themselves whether they really know more than these institutional investors? Either way, there are some facts you should know about Centro. 

Centro’s current financial structure is very complex. Its 2007 annual report shows Centro holds 50% interest in two diversified funds. In turn, these diversified funds hold 50% interests in a bunch of ownership funds, which hold full ownership on real property assets. 

This so-called two-tier ownership gives Centro flexibility to diversify its portfolio. It also makes it more difficult to gauge the group’s underlying value. In total, Centro manages 810 shopping centres indirectly through this two-tier ownership structure, 128 in Australia and 682 in the US. 

Even a Big Four auditor needs months to trace all the financial details of 810 retail properties. It’s very complex. And looking back through Centro’s annual reports for the previous five years shows the financial structure has become more complex with time and that its level of borrowing has increased.

Investors may compare Centro with its major Australian competitor Westfield. It is the largest shopping centre company in the world, yet it manages only 44 shopping centres in Australia and 59 in the US, according to its 2007 annual report. 

The current policy at Centro is to set the interest cover ratio at two times. This is obviously very low and should be another warning sign. 



On January 15, Centro announced it had appointed a new chief executive, Glenn Rufrano (who arrived in Australia from the US yesterday), after the resignation of former CEO Andrew Scott. Meanwhile, Centro’s lenders were considering extension of its loan arrangement. 

But then Centro revealed another two warnings. 

In its first warning, Centro said its foreign exchange hedging was down from 99% to 80.7% and the level of hedges is below internal policy requirement. Centro generates large proportion of its revenue from its US operation. Given current US market performance, significant decrease of Australian/US dollar hedging positions may introduce high volatility to Centro’s Australian dollar-denominated cash flows. This of course makes it harder to value Centro’s business. 
Next, Centro indicated there was a prospect to reclassify a proportion of its non-current debt into its current debt. There is still no concrete information regarding the size of such reclassification. If it is large, Centro runs the risk of financial reporting fraud. 

Investors may still be tempted to invest on the basis of very low price/earnings multiple (less than 0.10) or similarly super-low price-to-book ratios. They should tread warily. These two ratios are not valid measures given that Centro’s going concern status is in doubt. Investors should bear in mind that if a company is vulnerable to going bankrupt and is unable to continue normal operations, the price/earnings multiple and price-to-book ratio cannot be used to determine its relative value. 

The macro-economic environment also makes Centro’s situation more difficult. The US economy is on the fringe of what might be a severe recession. You may expect Centro’s performance (at least its short-term performance) to be severely impacted. 

It is important to distinguish speculation from investment. Putting money in a company with so many problems does not leave investors a margin of safety. My suggestion is clear: stay away from it. 


Quan Gan is a associate lecturer at the Australian School of Business of the University of New South Wales. *_


----------



## ROE (18 January 2008)

9krpm said:


> Yeah, that's great BUT they don't have to sell everything to cover 1.9B or even 3.9B debt - do they? And what they pay off, they no longer owe.
> 
> Also if they are only selling some assets, they would be silly to sell the ones that they will have to discount the most, however lets say they sell 7.8B of book to cover 3.9B (i.e. 50% of current value  - Mega Fire sale prices)
> 
> We now have (26,6 - 7.8) - (18 - 3.9) = 4.7  Yeah?




If they sell the lot and 30% off valuation
you got no Centro ... you just got 18B to pay 18B debt Centro owns the bank and game over, nothing left for share holders.

and if they manage to sell off 3.9 Billion to meet their debt by Feb 15, how much stuff do they need to sell? no one know it could be 50% of Centro asset, it could be 20%, it could be 30%.

Once the sale is done they still owns banks money and they will revalue
the whole Centro asset. What is that going to be? again who know, you could have asset less than liability or the other way around where you got more asset, again no one know.

too many unknown 

If someone can put a value on CNP say around $1 for certain and it selling for 50 cents I buy alot of it but no one can, there lies a problem.

Would you go and buy a TV without knowing how much it worth? buying what ever price they label, it may look cheap and sound cheap but is it actually cheap?

you need to know it rough values and buy it otherwise you may get ripped off.

I think Centro fall into this TV category 

I like certainty, something I can reasonably predict that make me money 1 year from today and 20 years from today and I work out how much all of those sum worth then I work out the share price, then I factor in my margin of safety then I go shopping when the price is right. Put your money into the unknown is gambling, you dont know what card you get deal next.


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## Aussiejeff (19 January 2008)

Centro has only three weeks left to raise the moolah, right? 

So, firstly, how long will it take for Centro to SELL enough assets to cover the debt payable on that date and secondly, how long would it take for the sale cash SETTLEMENT to go through? 

Everyone seems to be thinking Centro can sell at a moments notice and *bingo* the cash is instantly available, but I would have presumed that most financial settlements from the sale of major commercial assets take a darn sight longer to go through than the three weeks left?

AJ


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## oldblue (19 January 2008)

I doubt whether cash settlement in 3 weeks is the deadline. If lenders are secured, what they will be looking for is a firm commitment to sell to repay the loan(s). If they get that, its normally in their best interests to extend the loan temporarily, rather than to take action under their security and have the problem of disposing of the property themselves.
Of course, they may prefer to take possession if they think the property is worth more than the loan?


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## vida (19 January 2008)

Hi MINER

What does the Eureka report say about MFS?  Is it something along the same lines as those reports on CNP?  Would be very interested to know.

thanks


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## Miner (19 January 2008)

vida said:


> Hi MINER
> 
> What does the Eureka report say about MFS?  Is it something along the same lines as those reports on CNP?  Would be very interested to know.
> 
> thanks




Hi Vida
Until date I have not seen any posting on MFS from Eureka Report or Huntley's publications.
I will keep watching and will publish as soon as I see it.

Regards


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## Bushman (22 January 2008)

Ha ha - at 40 odd cents per share Centro is now trading at 100% of it's promised distribution for FY08. 

A yield of 100%. Classic!!


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## Nathan_b (22 January 2008)

yeh i know hey...

it looks good buying at these prices hey? i topped up today, i think will be really funny if they refinance and there is no further impact on dividend or little change..

will be a classic outcome, buying a share at its dividend.


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## zebop (22 January 2008)

yeh I bought some more shares today @.40c
I look at it this way: Plenty of negitive statements everywhere..and deserved. However no one outside Centro really knows the position or more importantly their stratgey to get out of this mess and go forward. The banks have one thing many are overlooking...they stand to lose heaps if it goes under..I would say it is in their interests to provide additional time and possible renew confidence in Centro with regard to possible new strategies..am I dreaming


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## TheAbyss (22 January 2008)

zebop said:


> yeh I bought some more shares today @.40c
> I look at it this way: Plenty of negitive statements everywhere..and deserved. However no one outside Centro really knows the position or more importantly their stratgey to get out of this mess and go forward. The banks have one thing many are overlooking...they stand to lose heaps if it goes under..I would say it is in their interests to provide additional time and possible renew confidence in Centro with regard to possible new strategies..am I dreaming




I stood to lose heaps if I closed some positions yet I closed them and wrote off some cash so I wouldnt lose even more. Why wouldnt the banks be of similar mindset zebop?


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## ROE (22 January 2008)

Buy CNP in hope and pray because when it comes to the bear market everyone is for themselves, wont be a white shinny knight coming along...everyone will be hording cash 

but good luck with your punt guys, I am too chicken to gamble and my bet on Tennis never pay off so I know how bad I am at gambling


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## nikkothescorpio (22 January 2008)

It's going to be one heck of a 'firesale'.   Should be a few other managers picking some assets up at very good prices.

What a dog of a time to have to do a carve up too - not that there ever is a great time but this is a very poor one.


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## Bushman (22 January 2008)

TheAbyss said:


> I stood to lose heaps if I closed some positions yet I closed them and wrote off some cash so I wouldnt lose even more. Why wouldnt the banks be of similar mindset zebop?




40 cps should be the floor for now given the revised distribution per share is also 40 cps. There has been no subsequent revised earnings guidance. 

Remember the banks who refused to refinance were yanks and the new CEO is a yank. Co-incidence? He is there to win BoA and Wachovia over using key relationships gathered  over 25 + years plus as the New Plan.  He is also a relationship man, unlike Scotty, so he might be able to pull a rabbit out of a hat.


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## 9krpm (23 January 2008)

The beleaguered Centro was also hit hard yesterday, down 0.65 cents to 40c despite suggestions that its new management, led by Glenn Rufrano, has won its bankers over and staved off any talk of receivership.

It is understood that the financiers will give the troubled retailer an extension on its February 15 deadline to help it trade out of the debt crisis.

However assets sales are still on the cards, with the United States-based hedge fund Citadel and the Canadian Brookfield now in the Centro data room, along with locals Stockland, Mirvac and CFS Retail, among others.

[source SMH]

It appears there will at least be a bit of competition for the assets?


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## xoa (23 January 2008)

Bushman said:


> 40 cps should be the floor for now given the revised distribution per share is also 40 cps. There has been no subsequent revised earnings guidance.




I'm worried it'll be the banks who pocket the 40cps, not shareholders.

-----------------------------------------------


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## Bushman (23 January 2008)

xoa said:


> I'm worried it'll be the banks who pocket the 40cps, not shareholders.
> 
> -----------------------------------------------




That is the risk at the moment. Nothing is certain with CNP - hence the CEO might pull a rabbit out of a hat. Also it is uncertain if 40 cps can be met given the likely asset sales and the effect on CNP FUM. Throw in the likely effect of the housing market collapse on US consumers but it is unlikely that this will affect FY08 distributions. FY09 is another story.


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## numbercruncher (24 January 2008)

> MELBOURNE, Jan 24 (Reuters) - The new chief executive officer of troubled shopping mall owner Centro Properties Group (CNP.AX: Quote, Profile, Research), said on Thursday he was not anticipating any asset sales now.
> 
> Chief Executive Glenn Rufrano told reporters said the company was currently pursuing injecting equity into the company. But he said he was not in a position give any figures at this stage.




http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSSYU00380920080124


New CEO seems a little confident, who knows he may swing things about a little ?


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## DionM (24 January 2008)

Well I bought into CNP today.  For better or worse.

Two things - confidence shown by the CEO (and he's a yank, as pointed out above).  Secondly, the news that Colonial didn't sell any of it's stock in CNP at all.  Colonial must know something to keep confidence like that.  Here's the link to that story: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aGG9zaRF6Z.E

If CNP can secure some sort of funding, they're off the hook.  A very very big IF, I agree.

I've only taken a very very small position - basically I've treated them like a speculative explorer ... I won't be too worried to see the money disappear; or indeed have to wait a long time to see something.

The dividend issue is interesting; if they secure funding and thing settle, there would be little reason for no dividends.  My little gamble could pay itself off in short time.


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## numbercruncher (24 January 2008)

Well your probably looking at paper + already Dion, pretty much sitting on daily high atm with 







> 678 buyers for 12,075,430 units  323 sellers for 7,646,895 units



 so maybe more to run today ?


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## DionM (24 January 2008)

numbercruncher said:


> Well your probably looking at paper + already Dion, pretty much sitting on daily high atm with  so maybe more to run today ?




Possibly, but like I said, it's a tiny position.  I bought at 47c too, so not exactly at the bottom.


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## TunaBum (25 January 2008)

http://business.theage.com.au/centro-can-be-saved-says-new-ceo/20080124-1nzf.html

Centro can be saved, says new CEO

Glenn Rufrano, Centro's new chief executive, outlines his refinancing ambitions for the property group.

January 25, 2008 

GLENN Rufrano, the man charged with turning around the fortunes of the Centro Properties Group, has ruled out a fire sale of assets, confident he can persuade the company's banks to extend a February 15 repayment deadline on $3.9 billion of debt.

In his first media briefing since being appointed to lead Centro in the wake of former chief Andrew Scott's resignation last week, Mr Rufrano admitted the company had a severe credibility problem.

He said Centro, which has lost $4.5 billion of its market value since revealing its refinancing problems to the market on December 17, simply had too much debt that needed to be paid back at a time he described as "the worst" period for debt markets for 20 years.

Mr Rufrano, who has been meeting with Centro's Australian banks - including National Australia Bank, Commonwealth Bank and ANZ - since arriving in Melbourne last week, will fly to the US tomorrow to negotiate with banks and bondholders.

The Australian banks, while not prepared to say publicly, have indicated that they have been in "serious discussions" with Centro to extend the deadline and to work on a new debt-refinancing plan.

Mr Rufrano said the banks could expect to get their money back if "they work with the company".

"We are being open, honest and transparent with them to convince them we are the best managers of their collateral," Mr Rufrano said.

"I have comfort that the banks are not going to put themselves in a position with us that will make it untenable for them and us as long as we're doing our jobs." He also said Centro had allayed the concerns of US bondholders, who last week engaged a law firm to retrieve $US450 million ($522.52 million) in notes, believing Centro was in default.

"We have now restructured their debt and they have all accepted it," he said.

Centro's new boss said the company was trying to raise money through a sale of its stakes in the unlisted Centro Australia Wholesale Fund in Australia as well as the Centro America Fund.

The two funds have a combined $3.7 billion in funds under management.

The company's "equity injection" plan also includes an issue of hybrid equity such as convertible notes.

Mr Rufrano said Centro had already had significant and equal interest in all three options, with the company to open up its books to interested parties for due diligence on Tuesday, a week later than planned.

Centro will also consider any offer for the whole group. But the company is not prepared to sell assets such as The Glen in Melbourne, or Bankstown in Sydney


Di


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## vida (25 January 2008)

I saw them bottom at .30c the other day but I was hard at work and could not focus on sharemarket for more than a few secs here and there, it was all I would have needed really. Time is of the essence during this volatility and then the opportunity passed and the day was over and the SP had risen a bit.  Then today I had more time to watch the market, was mesmerised by the SP movements in CNP and put in a buy order at .66 cents which was quite a way from bottom and I did pay too much considering what it has been this week but in the long run it probably will turn out to be a bargain. I hope so anyway - we can only wait and see. I am a long term investor and don't trade much at all as it takes too much out of me. If it spikes hard next week I may sell but really would prefer to hold - if it falls well i just hope not! There is more positive media about CNP lately so it just may pan out well.



DionM said:


> Possibly, but like I said, it's a tiny position.  I bought at 47c too, so not exactly at the bottom.


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## ASK (31 January 2008)

Centro continues to recover! looks like their might be some resistance at 70 cents... doubt it will break through until some get a positive media release. Anyone still jumping on board at the current sp?


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## megla (31 January 2008)

I decided to give it a chance. Jumped in at 63 last week - held my breath over the weekend and have been checking it daily. 

Not a lot invested. Doing it on gut feel.

If I'm wrong - oh well, but if it turns out to be able to recover - then from 63 cents it should go reasonably high. IMHO DYOR etc etc


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## vida (31 January 2008)

Good luck to you !!! I bought last week at .66c and wish I'd either bought the day before between .30c and 48c or even at today's SP of .58c etc etc.. we have great hindsight don't we ))))) .......  same as you I'm constantly flicking on comsec while working during day to check CNP sp and tried not to think about it over the weekend - I went to a fab wedding which helped.

I feel in my guts too that it will recover and do ok - my cousin has invested a lot in it at last year's SP and her financial adviser tells her it will recover. I don't know if he has a personal agenda to say that, probably wants time to leave the country with his commissions before his clients wake up to him 

Lets hope it goes our way and we make some money - we will deserve it

Vida 



megla said:


> I decided to give it a chance. Jumped in at 63 last week - held my breath over the weekend and have been checking it daily.
> 
> Not a lot invested. Doing it on gut feel.
> 
> If I'm wrong - oh well, but if it turns out to be able to recover - then from 63 cents it should go reasonably high. IMHO DYOR etc etc


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## hartley (5 February 2008)

Anybody know why it's dropped from 70c? I cant find much on it except for that "no rabbits in the hats for Centro" (below), but even that's not wholly negative.


Shares in Centro Properties Group and Centro Retail Group posted strong gains in the week ended 1 February 2008. However, Ross Barker of the Australian Foundation Investment Company advises caution when investing in stocks that have experienced a high degree of volatility in recent weeks. Nevertheless, some analysts are quite bullish about some of the stocks that have been heavily sold down amid the market volatility. Rob Stanton of JP Morgan has an "overweight" recommendation on Centro Properties, while Mark Carew of Macquarie Research rates Allco Finance Group as an "outperform" stock.


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## shinobi346 (5 February 2008)

Strange question to ask. One may as well ask why you think it should be at 70c. It's been going up and down erratically ever since its debt troubles were announced.

Until CER, CNP etc announce what they are going to do about the debt and how much the companies are worth, I think the price is going to keep moving up and down until then.


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## Big Bad Sammus (6 February 2008)

I heard on the grape vine 2 weeks ago that CNP was going to get their debt extention till end of April, then I heard today from the same very reliable source that it will be extended till September. 

Glenn Rufrano will return on Friday, so fingers crossed on Monday there will be a great announcement that he will have found a bank in the US to help their debt situation.

They will/should be able to sell their Wholesale funds for roughly $2.5 billion. So that should see the company back up on its feet (in terms of share price hopefully).

Their share price target is to reach $1.08 with in the next 2-3 months.


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## vida (6 February 2008)

I hope and suspect you are right but the SP appears to be thinking not so positively. Strange it is suddenly going south again today providing better buying opportunity for the brave and the astute ones  - Rufrano Rufrano



Big Bad Sammus said:


> I heard on the grape vine 2 weeks ago that CNP was going to get their debt extention till end of April, then I heard today from the same very reliable source that it will be extended till September.
> 
> Glenn Rufrano will return on Friday, so fingers crossed on Monday there will be a great announcement that he will have found a bank in the US to help their debt situation.
> 
> ...


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## So_Cynical (6 February 2008)

Hello...they tried to refinance for 6 months and couldn't...and now make that 8 months and still cant...whats changed?

Nothing

U guys buying in now, are better off at the casino...better odds.


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## Big Bad Sammus (7 February 2008)

So_Cynical said:


> Hello...they tried to refinance for 6 months and couldn't...and now make that 8 months and still cant...whats changed?
> 
> Nothing
> 
> U guys buying in now, are better off at the casino...better odds.




I beg to differ, I kind of know that 3 out of the big 4 banks are going to help refinance....this was all Rufranos' doing.

I'm not sure where you heard they couldn't refinance...

Alot will change now that he is on board here in Aus! But I guess time will tell!


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## nioka (7 February 2008)

Big Bad Sammus said:


> I beg to differ, I kind of know that 3 out of the big 4 banks are going to help refinance....this was all Rufranos' doing.
> 
> I'm not sure where you heard they couldn't refinance..



More information please. How do you "kind of know" that 3 out of the big 4 banks are going to help. Fact or rumour.


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## redandgreen (7 February 2008)

So_Cynical said:


> Hello...they tried to refinance for 6 months and couldn't...and now make that 8 months and still cant...whats changed?
> 
> Nothing
> 
> U guys buying in now, are better off at the casino...better odds.




The important thing that has changed in the US is that interest rates are lower now than 8 months ago. (the bulk of the debt is to US banks)

I do not consider that an investment in CNP < 60c is comparable to your odds at a casino. imo.

I am a holder.


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## Big Bad Sammus (7 February 2008)

nioka said:


> More information please. How do you "kind of know" that 3 out of the big 4 banks are going to help. Fact or rumour.




I know from somebody who actually attends those meetings at Centro. Won't mention any names!

I know a little bit more about what's going to happen than what most people would.


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## nioka (7 February 2008)

Big Bad Sammus said:


> I know from somebody who actually attends those meetings at Centro. Won't mention any names!
> 
> I know a little bit more about what's going to happen than what most people would.



 I had similar news from "pub talk" and bought a few on the strength of it. Also it convinced me to choose it for this months stock comp. The way I have been operating in the comp I probably put the mocker on it. With the falling interest rates in the USA though the money could be leaving the country making it harder to raise funds there.


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## ROE (7 February 2008)

Why buy stocks in hope and fear and blind when there are hundred of other good stocks to buy   

Uncle Warren said Rule number 1 is to safeguard your capital, that is the first rule, anything else comes second.


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## tigerboi (7 February 2008)

day traders paradise that suck fools in to buy at 63c gee...the day this ripped

down aplenty you could of got it for 42c-52c if you were quick held overnight

around 90c then sell at $1.46 ish next day if my memory is correct,i'll get that

info..................there low 42 high .805,next day open 95c high 1.495

and yep did trade in at 52c change of undies at 42c,sold next day at 1.46

havent touched it since..there was a 3 bagger minimum right there & you

got people saying fingers crossed...silly.the price runs on sentiment wether

they survive or not,the cnp top brass should go to jail for the shifty book

keeping,current to non-current asset,meanwhile the instos were bailing real

quick $10.00-$5.00 is proof of that,day trade yes..anything else you are

crazy...wait for 4/1 buy volume then buy,sell at 1.5/1buyvsell volume & you

will get yourself 10-20%...12.26% today,30% 25th jan.,35% 24th jan,

14.73% 4th jan.,92% right there...


7Feb	0.540	0.600	0.520	0.595	0.5602	1,606	24,954,454	13,981,419.43	12.26%
6Feb	0.540	0.560	0.520	0.530	0.5416	1,572	17,626,396	9,547,434.35	-10.17%
5Feb	0.630	0.640	0.585	0.590	0.6086	1,376	16,944,592	10,314,121.87	-9.23%
4Feb	0.675	0.680	0.640	0.650	0.6580	1,318	15,775,346	10,380,791.16	-1.52%
1Feb	0.680	0.715	0.650	0.660	0.6788	2,285	23,453,832	15,922,766.78	
31Jan	0.630	0.660	0.585	0.660	0.6246	2,335	34,878,381	21,790,177.20	0.76%
30Jan	0.715	0.720	0.630	0.655	0.6729	2,501	34,164,919	22,975,401.67	0.77%
29Jan	0.690	0.780	0.625	0.650	0.7022	5,765	100,344,238	70,460,463.52	4.00%
25Jan	0.580	0.670	0.545	0.625	0.6091	5,530	94,639,278	57,645,792.85	30.21%
24Jan	0.390	0.495	0.385	0.480	0.4544	4,713	73,941,955	33,604,996.95	35.21%
23Jan	0.460	0.495	0.335	0.355	0.4040	3,355	35,780,977	14,509,429.73	-11.25%
22Jan	0.465	0.465	0.400	0.400	0.4243	2,564	26,321,576	11,158,035.62	-13.98%
21Jan	0.485	0.580	0.465	0.465	0.5276	3,020	51,189,672	27,008,923.05	-3.12%
18Jan	0.475	0.505	0.465	0.480	0.4855	1,758	23,174,078	11,252,205.14	-5.88%
17Jan	0.500	0.520	0.465	0.510	0.4938	3,759	52,821,391	26,081,246.26	10.87%
16Jan	0.540	0.590	0.460	0.460	0.5204	6,988	111,241,763	57,895,748.60	-23.33%
15Jan	0.750	0.750	0.445	0.600	0.6237	9,413	140,109,145	87,396,171.15	-30.23%
14Jan				0.860		3	86,224	74,152.64	
11Jan				0.860					
10Jan	1.125	1.150	0.850	0.860	0.9338	7,346	105,619,397	98,628,092.32	-22.52%
9Jan	1.125	1.135	1.070	1.110	1.1089	2,262	21,900,240	24,285,761.48	-4.31%
8Jan	1.230	1.255	1.140	1.160	1.2065	2,809	36,726,822	44,307,814.30	-3.33%
7Jan	1.080	1.250	1.060	1.200	1.1818	5,163	66,626,868	78,763,191.82	-6.61%
4Jan	1.180	1.305	1.125	1.285	1.2133	5,425	71,401,198	86,642,978.08	14.73%
3Jan	1.055	1.120	1.050	1.120	1.0918	3,257	51,718,560	56,469,858.81	7.69%
2Jan	1.000	1.240	0.985	1.040	1.1396	5,553	81,265,544	92,617,601.60	2.97%
31Dec07	1.035	1.040	0.970	1.010	0.9997	2,080	17,198,854	17,195,097.57	-2.42%
28Dec07	1.040	1.085	1.005	1.035	1.0376	2,244	18,268,361	18,955,700.01	-5.91%
27Dec07	1.180	1.185	1.075	1.100	1.1254	2,560	17,052,809	19,192,412.93	-2.65%
24Dec07	1.160	1.220	1.120	1.130	1.1569	2,761	22,862,778	26,479,735.00	0.89%
21Dec07	1.300	1.305	1.105	1.120	1.2032	7,092	81,892,079	98,758,579.21	-15.15%
20Dec07	1.375	1.495	1.255	1.320	1.3674	10,541	115,499,277	157,925,179.84	9.54%
19Dec07	0.950	1.495	0.890	1.205	1.1830	20,072	233,918,682	278,115,629.99	49.69%
18Dec07	1.180	1.180	0.420	0.805	0.7720	20,647	281,464,535	217,335,996.55	-40.81%
17Dec07	2.300	2.900	1.290	1.360	1.7440	14,244	120,260,456	211,078,841.51


----------



## stockwhizben (7 February 2008)

My friend works there and there is no news they (staff) know that the market doesnt know. So nothing about loans extended etc can be substantiated


----------



## Joe Blow (7 February 2008)

Big Bad Sammus said:


> I know from somebody who actually attends those meetings at Centro. Won't mention any names!
> 
> I know a little bit more about what's going to happen than what most people would.




Implying that you are privvy to information from insiders will get you banned from this forum.

Please do not do it again.


----------



## Bushman (7 February 2008)

stockwhizben said:


> My friend works there and there is no news they (staff) know that the market doesnt know. So nothing about loans extended etc can be substantiated




I work there I can confirm that the staff below Board/CEO/Executive Committee level know nothing. 

Place is awash with consultants (KPMG, McGrath Nicholl, PwC) all trying to either flog assets (CAWF, CAF as disclosed), protect the banks interest, protect what is left of Centro shareholders interests, or audit the books. All as disclosed. 

I would treat rumours with great caution. Why not wait until the 14 Feb and hear it from Rufrano's mouth. 

Otherwise sit tight and sweat it out like all of us at ground zero are doing.  

Those savvy enough would have been on the Centro website and seen that the syndicates are paying half year distributions. But given there is no trading halt, you should all have figured that out by now. If that counts as bank support then happy days.


----------



## Quixis (8 February 2008)

Bushman said:


> Those savvy enough would have been on the Centro website and seen that the syndicates are paying half year distributions. But given there is no trading halt, you should all have figured that out by now. If that counts as bank support then happy days.




And for those not savvy enough what does that mean? At least from your point of view?

I see a lot of he said, she said, they said, posts which really have no substance. Also if the posts stating "I know someone" can be complete BS so DYOR people. That person who tell our poster this information is doing an illegal act if I'm not mistaken?


----------



## Bushman (8 February 2008)

Quixis said:


> And for those not savvy enough what does that mean? At least from your point of view?
> 
> I see a lot of he said, she said, they said, posts which really have no substance. Also if the posts stating "I know someone" can be complete BS so DYOR people. That person who tell our poster this information is doing an illegal act if I'm not mistaken?




Money for distributions means that the underlying business cashflows (remember syndicates own the property), as indicated in the various market releases, are strong and the syndicates are not being forced to retain money to manage cashflows. Each syndicate is backed by a separate bank facility so, in principle, the banks are comfortable with the syndicate paying a distribution. Does this fact alone mean CNP is out of the woods? No. Is it a positive sign? Yes IMO but off course the syndicates are propery owners and separate legal entities to CNP. CNP does generate significant fees from the syndicate owners though. Please DYOR though. It is all publicly available information.  

As for alledged individuals leaking confidential Board room information, absolute rubbish! This would be highly illegal and if anyone acted on this information, it would be a prima facie case of insider trader which is a very serious charge. I am sure nobody in their right mind would stake their professional reputation or risk criminal prosecution to post a rumour on an internet forum. 

Google insider trading if you are unsure of what it is and what its consequences are.


----------



## Quixis (8 February 2008)

Cheers Bushman.

But do the banks have any say in whether the dividends are paid? I know the cash flows are good, just it would seems if a bank can say you can't pay a divie, they'd be running your business?


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## ROE (8 February 2008)

They can say as part of refinance agreement.
you give us all your dividend and pay down debt until such time we are comfortable with the level of debt then you can pay your share holders
and if brown stuff hit the fans, we got some dividends and your share holders get nothing.


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## Trojax (8 February 2008)

CNP and CER gaining today, just day traders or something in the wind?

I could only find this article regarding CER

http://www.businessspectator.com.au/bs.nsf/Article/Centro-Retail-appoints-advisors-BL37G?OpenDocument

Assuming this is the cause of the large jump, would this be indicative the debt negotiations are also close to a resolution for CNP?


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## nioka (8 February 2008)

Quixis said:


> Cheers Bushman.
> 
> But do the banks have any say in whether the dividends are paid? I know the cash flows are good, just it would seems if a bank can say you can't pay a divie, they'd be running your business?



 I would say that in a case like this the banks ARE running the business. I can remember times when the bank controlled how I ran my business. The difference between running and controlling is not great. Any one who has had a margin call recently will agree that their trading has been at the discression of their banker.


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## vida (10 February 2008)

Its strange the media have been suddenly quiet on Centro over past days. I expected some reporting on how Rufrano was going in USA but nothing.  If he is out of the country doesn't mean he is out of touch - so maybe its good news soon and maybe its bad news soon. I feel a trading halt coming on.


----------



## Trojax (10 February 2008)

vida said:


> Its strange the media have been suddenly quiet on Centro over past days. I expected some reporting on how Rufrano was going in USA but nothing.  If he is out of the country doesn't mean he is out of touch - so maybe its good news soon and maybe its bad news soon. I feel a trading halt coming on.




Wondering the same, has been very quiet however Rufrano did say publicly before leaving that there won't be any announcements until close or up to the 15th Feb. 

Though the last lack of info gap 1 1/2 weeks in late Jan saw the share price drift downwards, interestingly it's drifted upwards reflecting sentiment buildup to the 15th Feb. 

The main question I ask myself is why did he go in the first place, what purpose was the trip serving, what could he gain in the US he couldn't do here and what was his objectives. I believe the following:

1- Presenting sale of the Centro America Fund to US interests by utilizing his personal networking and contacts which Scott may have lacked.
2- Sourcing avenues\costing of refinancing the short term debt ($3.9 Billion or less depending on CAWF, CAF) at perhaps a slight premium than US investment groups will be receiving currently, though lower than what Centro's costs would be domestically. This could be a second play in order to hold onto assets currently for sale.
3- Drumming up interest in the group as a whole for an equity injection.

I think there's a few 'givens' to throw into the equation:

1) CAWF will be sold, for how much we won't know till the deals done, shortlisting as far as I'm aware is completed, either way it directly should remove given the public available info around $2.1 Billion of the $3.9 short term debt, $1.8 billion left.

2) CAF will be sold, same as above, the markets talking $1.1 Billion or close to, hard given the nature of the assets and market sentiment in the US, if achieved this or close to, assume $900 million left which shouldn't be an issue for local lenders provided Rufrano can untangle the relationships between their entities to a clearer picture, especially regarding debt to equity positions and asset backing of loans.

The other issue been pondering is CER and Centro's 50% stake in it, gearing is quite low in comparison to CNP and assets of high quality. This would be a last resort though given broker sentiment to buy as opposed to CNP (likely due to differences in market exposure) and they've just had independent advisors appointed separate to CNP as requested by refinanciers of their $1.1 Billion which appears closed to locked in (since this was a requirement of the financing on the table) it looks possible to me a sellout of their 50% stake is another avenue though a last resort.

Either way, with lack of solid deals made its all speculation.. on the face of it they'll be selling 2 stakes with a smaller refinance or perhaps 3 stakes with debt reduction which either should solve the short term debt issue, and to me, provided they can as part of these sales retain the management rights (if sold to the likes of superannuation funds, this is likely) pay a reasonable dividend 12 months + (cancelled previously to reduce debt\equity levels to make more attractive\reduce debt).

I'm looking at it thinking a 6-12 month recovery with the red tape removed. Personally I think the 2 sales will happen and the locals will refinance the difference knowing their risk positions will be reduced. The share price will reflect dividend ratio, though won't be until 2009 as adverse sentiment throughout 08 will fluctuate all over the place until the dust settles and company info is available. I'm buying up at the sentiment dips for now and taking a 12m view with a hold perspective.


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## PhoenixXx (13 February 2008)

> Wednesday February 13, 2008, 8:01 am
> 
> SYDNEY, Feb 13 (Reuters) - Creditors of Centro Properties Group CNP.AX have given it an extra two months to refinance its debt and help avoid a firesale of assets, the Sydney Morning Herald paper reported on Wednesday.
> 
> ...




Was relief this morning to see that CNP could 'at least' avoid the firesale.
So...what's next from here?


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## GOSAFAS (13 February 2008)

Pity that Centro have adamantly denied this report. I wonder if the SMH is going to be involved in some litigation for publishing false reports?


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## wilko66 (13 February 2008)

GOSAFAS said:


> Pity that Centro have adamantly denied this report. I wonder if the SMH is going to be involved in some litigation for publishing false reports?




Just asking whether you've seen a report apart from the Bloomberg one?  In it the Centro spokesman doesn't adamantly deny the report, he simply states that "no terms have been agreed."  The SMH article refers to "agreement in principle" and the two positions aren't incompatible....not much grounds for litigation if in fact it turns out to be true


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## GOSAFAS (13 February 2008)

"There has been no agreement reached at this point with the U.S. and Australian banks. Negotiations are continuing on the terms and duration of any extension," a Centro spokesman said. What part of this exercise don't you understand mate?. No agreement reached MEANS no agreement reached.


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## GOSAFAS (13 February 2008)

AP
Report: Centro, Lenders Still in Talks
Tuesday February 12, 11:57 pm ET  
Report: Australia's Centro Still Talking With Lenders About Extension of Debt Deadline 


MELBOURNE, Australia (AP) -- Centro Properties Group, Australia's second-largest shopping mall owner, remains in talks with lenders about an extension on 3.9 billion Australian dollars (US$3.5 billion; euro2.4 billion) in maturing debt, a media report said Wednesday.


Earlier Wednesday the Sydney Morning Herald reported, without citing sources, that Melbourne-based Centro had been granted a reprieve by lenders to avoid a fire sale of its assets and had until mid-April to establish its plans.

An unnamed Centro spokesman said there is no agreement on an extension as yet, according to Dow Jones Newswires. The spokesman said Centro is still in talks with U.S. and Australian banks. - potentially litigious if it doesn't happen - dont you think ?


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## wilko66 (13 February 2008)

GOSAFAS said:


> "There has been no agreement reached at this point with the U.S. and Australian banks. Negotiations are continuing on the terms and duration of any extension," a Centro spokesman said. What part of this exercise don't you understand mate?. No agreement reached MEANS no agreement reached.




Thanks mate. Was only asking as I'd only picked up snippets.  I was wondering though about the media's angle as bad news runs for days and it seemed good news might be getting only a small run (which wouldn't be atypical).  All articles I've seen source the SMH though which I guess is answer enough.  Cheers,


----------



## Nathan_b (15 February 2008)

trading halt!!!!!!!

where to from now? will we see something more substantial today? or are we going to be left over weekend?


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## nioka (15 February 2008)

Here comes the moment of truth where we will see the answer to the rumours and speculation. Going by the detailed quotes the general expectation is for good news.


----------



## Nathan_b (15 February 2008)

it is indeed monent of truth. i have feeling it is positive, but i dont like having to hang all over the weekend to hear the verdict


----------



## numbercruncher (15 February 2008)

Good luck all - I took a small profit and bailed, for your sakes I hope I made the wrong choice 

Im punting a reprieve as mentioned in the earlier article until a later date, just hope broader market conditions dont deteriorate further during the assumed reprieve.


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## Bushman (15 February 2008)

nioka said:


> Here comes the moment of truth where we will see the answer to the rumours and speculation. Going by the detailed quotes the general expectation is for good news.




It will be to detail an extension of current financing arrangements as reported in various media outlets. News will be out Tuesday if past trading halts are anything to go by.


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## Nathan_b (15 February 2008)

from what ii gather (could be wrong) i think they must give ann today as this is deadline day. 
obviously the news would have some backing re: extension... it is risk, i belive if ths is what it is SP should be over $1 on monday or soon as that is over.

i was going to sell some CER to rebuy CNP this morning DOH!

i guess once out of halt they will go upwards at same %  rate so i can jump ship


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## vida (15 February 2008)

I think it will be good news and the SP should spike when trading halt lifted but checking the Comsec site shows the next buy offer is .49cents but I know what Comsec shows during offmarket times is often weird & wrong.  I am fairly confident it will be good news but not so confident about the SP going too high in this current climate, it is possible reaction will be negative even if it is positive news or am I being too pessimistic.  I hope its all good.




Nathan_b said:


> from what ii gather (could be wrong) i think they must give ann today as this is deadline day.
> obviously the news would have some backing re: extension... it is risk, i belive if ths is what it is SP should be over $1 on monday or soon as that is over.
> 
> i was going to sell some CER to rebuy CNP this morning DOH!
> ...


----------



## Bushman (15 February 2008)

Ann out on the Centro website for both CNP and CER. Extension to refinancing granted. Also admit to current/non current debt classification being incorrect.


http://www.centro.com.au/NR/rdonlyr...nsionsofFinancingArrangementsFINAL15Feb08.pdf


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## vida (16 February 2008)

That is great !! Means the trading halt should be lifted on Monday - fast work.

I am so confident in the company going forward and happy I have held onto my shares which I bought for only .66 cents. 

Methinks they will be up to $X in matter of weeks. My only regret is that I didn't buy around .30c twice as many or even in .40c range, but it all happened too fast for me to catch it.  

Its always easy to see in hindsight what we should have done but we react to ourselves as if we should have known, should have done, should have seen

My cousin & her husband who bought $100k worth last year at top SP range were not worried - their financial adviser investigated carefully and told them to ignore recent problems and get on with their lives. Their confidence boosted mine in buying at .66c.  We may have all done the right thing, soon c












Bushman said:


> Ann out on the Centro website for both CNP and CER. Extension to refinancing granted. Also admit to current/non current debt classification being incorrect.
> 
> 
> http://www.centro.com.au/NR/rdonlyr...nsionsofFinancingArrangementsFINAL15Feb08.pdf


----------



## vida (16 February 2008)

"Shareholders get nothing..."?  Shareholders will get better SP value on the shares, what are you talking about and dividends will come back in future.



ROE said:


> They can say as part of refinance agreement.
> you give us all your dividend and pay down debt until such time we are comfortable with the level of debt then you can pay your share holders
> and if brown stuff hit the fans, we got some dividends and your share holders get nothing.


----------



## oldblue (16 February 2008)

"Ignore recent problems and get on with your lives "  would be good advice because we can't do anything about the situation ( except sell to crystallise a loss if so inclined ) and worrying won't achieve anything.  

At the same time, I'm not expecting this stock to do much more than struggle on for the next couple of years or so.

Disc: Bought a few on the way down at $1-40


----------



## vida (16 February 2008)

As long as it can struggle along for a few years and doesn't just die, that is ok.  If it can keep going it will rebuild a better business and we will all benefit, but to rebuild it will take time and rome wasn't built in a day. Once they prove to the market they are going to work through it, confidence will return. The market isn't going to go gaga too fast, as generally property sector is very out of favour but it will come back & when it does .... gusher

Only my optimistic outlook working here... 



oldblue said:


> "Ignore recent problems and get on with your lives "  would be good advice because we can't do anything about the situation ( except sell to crystallise a loss if so inclined ) and worrying won't achieve anything.
> 
> At the same time, I'm not expecting this stock to do much more than struggle on for the next couple of years or so.
> 
> Disc: Bought a few on the way down at $1-40


----------



## hartley (17 February 2008)

I'm a bit new to the stock market, but I assume this is great news (for the company and the SP). I am wondering what my selling strategy should be, if I'm looking to get out within the next three months, i.e. should I sell at the top of the first peak on Monday, with maximum momentum, or wait for 2 months for it to stabilise?

That being asked, do you think this will be a good long-term stock to hold? Would my money be better placed here than in BHP?


----------



## vida (17 February 2008)

gOSH hARTLEY, You ask some hot questions. If anyone here knew the answers we would all be zillionaires in no time.  No one can advise you on how to gamble on the stockmarket, its something wise people would not encourage.  If you want to trade short-term on CNP then I wish you luck. For one thing how can you sell at the top of the first peak on Monday? How will you know when you are at the top?  You only can see what the top was at the end of the day. Tops and bottoms can only be judged retrospectively.

If CNP spikes on Monday and it should but there are no guarantees, you could sell if you wish when a decent profit is showing for you. A profit is what you are after. You should decide what a good profit would be well in advance and decide well in advance if you decided to 'hold' how prepared you are to take the risk based on what you research tells you.

YOu can't compare CNP with BHP especially at this point in time.  They are different animals.  You should engage a professional adviser I think.

We are not qualified here to give advice, we do not stand by it and have nothing to lose if things do not work out. 

Personally I hope this CNP restructuring works out and there is a good chance it will. People will make money trading it in short term and many will lose doing same.  

I wish you luck whatever you decide.  If you want to make certain money in longterm probably BHP is the better choice. If you have money you can afford to risk then CNP might be a good gamble.  Are you a gambler?












hartley said:


> I'm a bit new to the stock market, but I assume this is great news (for the company and the SP). I am wondering what my selling strategy should be, if I'm looking to get out within the next three months, i.e. should I sell at the top of the first peak on Monday, with maximum momentum, or wait for 2 months for it to stabilise?
> 
> That being asked, do you think this will be a good long-term stock to hold? Would my money be better placed here than in BHP?


----------



## hartley (17 February 2008)

Haha I see your point, I suppose a *slightly* more answerable question would be, with your greater knowledge of the stock market, does news like this often send the SP up high, from which point it slightly corrects downwards, or does it *always* go up steadily? I realise that these things aren't predictable, but I would like to know whether they happen regularly or not...

I suppose I am still asking too much haha, with time I will gather experience, but I would still value any response you have.

To answer your question, yes, I am a gambler (when the odds are good enough), and I can afford to lose what I have in CNP.


----------



## vida (17 February 2008)

Well CNP have only had a reprieve from wipe out not a clean bill of health. There is still no certainty at this stage so I would expect that the SP is likely to go up on Monday who knows how high, but then it will drop with the continuing uncertainty and with people selling up taking profits. We can only expect volatility for the next few months and at what level the SP will stabilise we will find out when it happens. The degree and rate of rise and fall is unpredictable but if you check the price history on CNP you will see that the SP rises and falls have been extremely fast. We will see what happens.





hartley said:


> Haha I see your point, I suppose a *slightly* more answerable question would be, with your greater knowledge of the stock market, does news like this often send the SP up high, from which point it slightly corrects downwards, or does it *always* go up steadily? I realise that these things aren't predictable, but I would like to know whether they happen regularly or not...
> 
> I suppose I am still asking too much haha, with time I will gather experience, but I would still value any response you have.
> 
> To answer your question, yes, I am a gambler (when the odds are good enough), and I can afford to lose what I have in CNP.


----------



## vida (18 February 2008)

Centro sinks $1.5bn deeper in debt
Miriam Steffens, Sydney 
February 18, 2008 

CENTRO Properties Group has admitted its debt situation is more precarious than previously revealed, with current liabilities about $1.5 billion higher than stated in its accounts.

The embattled shopping centre owner disclosed the accounting mistake on Friday night when it confirmed it had won a last-minute reprieve from its lenders to refinance debt due that day.

The board has suspended its 40.6 ¢ per share distribution forecast for the year until it finds a way out of the crisis.

The additional current debt comes on top of $1.1 billion disclosed when Centro corrected its preliminary 2007 accounts in September. It means the company will have to renegotiate or repay close to three quarters of its $3.6 billion total debt within the next 12 months.

Centro has so far refinanced about $209 million of the additional $1.5 billion in short-term debt, and said it was "continuing its review of the circumstances surrounding the original classification" of its liabilities.

The latest announcement provides fresh ammunition to possible class action suits by disgruntled shareholders, who have seen the value of their investments decimated over the past two months.

Centro's shares have plummeted 89% since mid-December when the company revealed it was caught out by the global debt market crunch, and was struggling to refinance $3.9 billion in short-term debt after its massive US expansion.

The stock is expected to start trading again today after shares were suspended at 61 ¢ on Friday pending the outcome of negotiations with Centro's Australian and US lenders, including ANZ, Commonwealth Bank and JP Morgan. Talks dragged on until late Friday as one of its main lenders held out for better terms. The company ultimately secured an extension for about $US1.3 billion ($1.4 billion) in debt for its US business until September 30, plus $US80 million in additional funding.

The Australian lenders have granted a lifeline until April 30 for $2.3 billion in debt.

Centro expects the Australian banks may also come around to extending their facilities through to September, but they have kept their options open to monitor the progress of its reorganisation. Bond holders in the US have agreed to hold off alongside the Australian banks.

Centro is looking to sell its interests in its unlisted Australian and US shopping centre funds or find a cornerstone investor for the whole company.

Glenn Rufrano, who took charge last month after the ousting of the former boss, Andrew Scott, said the extension would give Centro "sufficient time" to work out its options. "The strategic review is progressing well with a significant number of parties interested in pursuing a recapitalisation of the group," he said.

Centro's listed spin-off, Centro Retail Trust, has also had to rack up its current debt figure, saying $598 million of its $1.4 billion in debt would have to be reclassified as due in the next 12 months.

Centro Retail has also suspended its dividend guidance for the year.


----------



## Trojax (18 February 2008)

vida said:


> Centro sinks $1.5bn deeper in debt
> Miriam Steffens, Sydney
> February 18, 2008




Vida FYI there are differences in your posted article above compared to the printed article from smh, things are missing or changed.. not sure where yours came from or a repost from elsewhere though I've marked in bold the missing text.
=http://business.smh.com.au/centros-15b-debt-headache/20080217-1sny.html

* Centro's $1.5b debt headache
* Miriam Steffens
* February 18, 2008

CENTRO Properties Group has admitted its debt situation is more precarious than previously revealed, with current liabilities about $1.5 billion higher than stated in its accounts.

The embattled shopping centre owner disclosed the accounting mistake on Friday night when it confirmed it had won a last-minute reprieve from its lenders to refinance debt due that day. The board has suspended its 40.6-cents-a-share distribution forecast for the year until it finds a way out of the crisis.

The additional current debt comes on top of $1.1 billion disclosed when Centro corrected its preliminary 2007 accounts in September. *While Centro's total debt remains unchanged*, it means the company will have to renegotiate or repay close to three quarters of its $3.6 billion in liabilities within the next 12 months.

Centro has so far refinanced about $209 million of the additional $1.5 billion in short-term debt, and said it was "continuing its review of the circumstances surrounding the original classification" of its liabilities.

The latest announcement provides fresh ammunition to possible class action suits by disgruntled shareholders, who have seen the value of their investments decimated over the past two months.

Centro's shares have plummeted 89 per cent since the company in mid-December revealed it was caught out by the global debt market crunch, and was struggling to refinance $3.9 billion in short-term debt after its massive US expansion.

The stock is expected to start trading again today after a halt on Friday pending the outcome of negotiations with Centro's Australian and US lenders, including ANZ, Commonwealth Bank and JP Morgan. Talks dragged on until late Friday as one of its main lenders held out for better terms. The company ultimately secured an extension for about $US1.3 billion ($1.4 billion) in debt for its US business until September 30, plus $US80 million in additional funding. As flagged in the Herald last week, the Australian lenders have granted a two-month lifeline until April 30 for $2.3 billion in debt*, including $1 billion which would be due in the next eight weeks.*

Centro expects the Australian banks may also come around to extending their facilities through to September, but they have kept their options open to monitor the progress of its reorganisation. Bond holders in the US have agreed to hold off alongside the Australian banks.

Centro is looking to sell its interests in its unlisted Australian and US shopping centre funds or find a cornerstone investor for the whole company. Glenn Rufrano, who took charge last month, said the extension *(no mention of ousting in scott in pubished article compared to post)* would give Centro "sufficient time" to work out its options. "The strategic review is progressing well, with a significant number of parties interested in pursuing a recapitalisation of the group," he said.

*The company has shortlisted four bidders for its stake in the Australian wholesale fund, which owns $2.6 billion worth of centres. Centro will report first-half earnings on February 28.*

Centro's listed spin-off, Centro Retail Trust, has also had to increase its current debt figure, saying $598 million of its $1.4 billion in debt would have to be reclassified as due in the next 12 months.

*The trust has refinanced $508 million of that current debt since July 1. It has also provided a $US450 million guarantee for Centro's US bond holders. *Like its parent, Centro Retail has suspended its dividend guidance for the year.


----------



## vida (18 February 2008)

I took the article in its entirety from The Age and certainly myself didn't amend anything. This was around 12.30 am this morning, so perhaps the article you found was updated by later in the morning. Its nothing we actually didn't know last week I believe, but it does sensationalise the issues.


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## wilko66 (18 February 2008)

vida said:


> I took the article in its entirety from The Age and certainly myself didn't amend anything. This was around 12.30 am this morning, so perhaps the article you found was updated by later in the morning. Its nothing we actually didn't know last week I believe, but it does sensationalise the issues.




I wrote to the Age this morning outlining the story inaccuracies (and asking them to change the misleading/sensationalist headline).  I notice they are the only Fairfax paper to write it up with that inflammatory title.

Not sure if it's why they changed but I figure we should all keep them on their toes....no secret on the outcome they are rooting for; I guess they think it'll sell more papers than a solid recovery.


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## moneymajix (18 February 2008)

*Re: CNP - Share Price Rises*

http://business.smh.com.au/shares-rise-despite-centros-15b-debt-headache/20080217-1sny.html


Shares Rise 


Miriam Steffens 
February 18, 2008 - 11:20AM 

Page 1 of 2 


_Centro shares rose more than 16 per cent at the open but settled back to be up 8.2 per cent or 5 cents at 66 cents by 10.40am, but are still down almost 90 percent since it revealed in December it was having trouble repaying debt.

"It's almost impossible to quantify what the equity in this business is worth,'' said ING Investment Management portfolio manager Justin Blaess. He said the stock was stock dominated by day traders rather than long-term investors._


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## hartley (18 February 2008)

Well, today's performance (so far) was uninspiring...

So, my rookie analysis would be that unless there is some slow-reacting build up of investor confidence, or there is a big announcement that they have found a new investor/partner or sold assets at a good price in order to finance the debt, the share price is unlikely to break 70c? The fact that they have assets and they have a profitable business under the right circumstances (don't they?) means that one of these outcomes is highly likely.

On the other hand, if there are any more nasty surprises about debt/book-keeping the share price is likely to head further south, but providing short-term debt repayments were the only problem, the big banks would not let them 'just die' completely.

Your (disclaimed) opinions?


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## nioka (18 February 2008)

*Re: CNP - Share Price Rises*



moneymajix said:


> "It's almost impossible to quantify what the equity in this business is worth,'' s[/I]



 That is also about the best conclusion I can come to at this stage. I'm holding trying to double the price I paid, 55c. I expect to get there, had hoped today was the day. Patience is a virtue.


----------



## DionM (18 February 2008)

I'm still not sure what to do with CNP.

Do I trade it when I've made some money, or do I hold onto it like some of my other blue-chips?

Is it still a blue-chip?

I don't know.

I'm tempted to keep it for the 5-10 years I'm holding other stocks (e.g. CBA, BHP etc).  I just don't know what to make of it.  I have a small holding, bought at 47c.  I treated it like a spec mining player.


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## Bushman (18 February 2008)

hartley said:


> The fact that they have assets and they have a profitable business under the right circumstances (don't they?) means that one of these outcomes is highly likely.




That is the problem Hartley - due to the complex business structure, no one is sure what the value is of CNP's tangible asset backing. Scotty called it the 'co-invested funds under management' model. This meant that Centro held a 'cemented', ie controlling, stake in the myriad of listed (CER) and unlisted (syndicates, DPF, DPFI, CAWF, CAF) funds. So, in the interest of KISS, you cannot say what assets Centro own. The fact that they have suspended the FY08 distribution also suggests that they do not know what revenue they are going to earn from the services (ie funds management) business. Remember that much of the services upside were fat acquisition fees, development fees and the like. 

Now it is true that the underlying business (ie property ownership and property management) is strong and underpinned by long terms leases (15 plus years) to major retailers in Aus and the US (Walmarts, Coles, Woolworths etc). However what no-one knows with 100% certainty at the moment is who is entitled to this revenue. 

As such, the announcement was positive in that there is no fire sale and the banks are starting to trust Glen Rufrano. However the complex structure remains and until it is sold (CAWF, CAF) or wound back there will be uncertainty about future NTA and revenue streams. As for revenue growth, forget it. No acquisitions, proposed developments delayed, etc, etc. That is what drove the share price - the services business valuations. Upside will not return until the base is understood, stabilised and once more capable of driving FUM expansion. 

Hence the historically low share price. 

Good luck holders. At the moment it is a stab in the dark re a valuation given what is knows, but is has a good property/FUM team and the banks are starting to sound neutral to positive. Still very risky though. 

PS: someone asked the difference between BHP and Centro? Where do you begin? Probably Balance Sheet 101 and what a gearing ratio is!


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## nioka (20 February 2008)

CNP certainly hasn't risen to the latest financing arrangements. A short burst and then sellers took hold and we are back to the starting blocks as the judges called false start. There doesn't seem to be a white knight that sees value in it's property holdings. I hope something happens in the extended time for debt reconstruction. I'll hold and maybe take a punt on a few more if it falls any further.


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## WillH (21 February 2008)

There seems to be understandable debate over whether or not this is a stock worth investing in and there are a great arguments either way.  The press has been very unkind to Centro of late, even though the banks have found some good reasons to be lenient.

I myself am confident that the new boss, Glen Rufrano, is a masterful enough negotiator to see this tough patch through and develop a win/win for all involved.

During the course of my research, I found an analysis of the company.

Hope this helps.


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## vida (21 February 2008)

I think the Ord Minett report is damn encouraging but is it reliable? At this stage of pretty much full disclosures CNP is very transparent and their analysis is probably a good guide to what to expect but nothing guaranteed. They think .61 is fair value but now the stock is way down from there.. if I believed in Ord Minett (and maybe i should) i would start to accumulate for the long term and what an amazing once in a lifetime opportunity it could be


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## reece55 (21 February 2008)

Bells have a target of about 80 cents, so it seems that most agree that CNP does have some form of scrap value.... Take them with a grain of salt however, the same analysts had 7 - 10 targets pre the collapse....... Risk/Reward says this one just doesn't stack up..... 

One positive that must be said for Centro is that at least the stock is still trading unlike AFG and MFS, and in addition has actually been fairly good in relaying key issues to investors post the collapse.....

Cheers


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## Bushman (21 February 2008)

reece55 said:


> One positive that must be said for Centro is that at least the stock is still trading unlike AFG and MFS, and in addition has actually been fairly good in relaying key issues to investors post the collapse.....
> 
> Cheers




The management team under Glen Rufrano are top notch property and fund managers with many years experience in the property industry. 

Glen is a straight shooter and if anyone can pull CNP out of the quagmire, he is it. I have been very impressed with him.

The frustrating part of watching all this is that it was simply a deal to far (New Plan) that has caused the balance sheet distress. Add in the complex structure and you have the dire situation today. The underlying Australian and US properties are running at 1% to 5% vacancy rates and remain cash cows hedged by long term leases to Coles, Woolworths, Walmart and the like. There was also a value adding development pipeline the length of your arm that has had to be postponed. 

If they can refinance successfully (the great unknown), keep the asset sales to a minimum and get the property managment/funds management business moving again, then CNP will be a viable and cash producing business again. Of that I am certain. 

IMO it is a brave call to get in today but it ain't completely broke yet and can be fixed. Time alone will tell the full picture. 

As an aside, the whole LPT sector has been smashed in the current 'shoot first, ask questions later' climate. The contrarian view is that these are starting to represent compelling value on yield basis. Goodman, Valad, even Westfield could return good cash yields and capital appreciation for those investing with a long term view. It does not have to be CNP or nix for those looking for value in LPT's but with less of an appetite for risk. 

Good luck to the longs.


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## sonicwind (21 February 2008)

No one knows the true value of CNP so to a beginner like myself I find it hard to understand why share value has been decreasing steadily since Tue, given there was no real bad news. Also trade volume seems higher than a week ago

So I came up with two explanations:

(1) big traders with better info than us sense there is a storm coming?
or
(2) big traders try to profit by selling more than what they owed on tuesday and keep price down over the 5 day period??

I am tempted to believe in (2) so i think price should stay flat at best tomorrow, which is when I will join the CNP club, and then wait for value to go up on monday.


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## nioka (21 February 2008)

The inability of CNP to maintain an increase in the SP could be explained by the fact that there has been a deal of speculative trading originating from the expectation of good news. A lot of the shares were probably bought on "three day" credit. When the price first rose some traders sold for a small profit, others bought hoping for a further rise according to the "chart". As the three day window ran out some sales would have been made at a loss to prevent default. This has caused the reversal. My view is that flurry will end this week and next week the buyers will be those like myself who look forward to a price climbing to $1.20+ over a period of some months. I calculate this figure from an examination of the balance sheets and valuations available. DYOR I'm often wrong.


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## ROE (21 February 2008)

Bushman said:


> The management team under Glen Rufrano are top notch property and fund managers with many years experience in the property industry.
> 
> Glen is a straight shooter and if anyone can pull CNP out of the quagmire, he is it. I have been very impressed with him.
> 
> ...




Management account very little when your model is flaw in the first place.
Uncle Warren famous last word

“When a management team with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.”


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## Bushman (21 February 2008)

ROE said:


> Management account very little when your model is flaw in the first place.
> Uncle Warren famous last word
> 
> “When a management team with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.”




Ha ha - good one Roe. Yep the 'turn $1 into $10' magical model was a dog once credit markets froze up.

However I would counter that by saying management now count for a great deal when the primary concern is trying to refinance CNP's debt with a bunch of risk averse bankers.


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## WillH (22 February 2008)

Well this all begs a few questions, "How good is the management team?" and "Can they successfully re-model?"
Much of the problem seems to have been the complexity of the old model, which has created difficulty for transparency.

And in the interest of transparency, I have already purchased a holding of CNP


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## sting (27 February 2008)

Looks like another blow to CNP when companies get into trouble VULTURES are quick to attack. Pelorus has called a meeting to take over MSC16 and if you can believe the Courier Mail yesterday they are well on the way to take over a further 10 or 11. If this occurs CNP is gone without the management rights and fees CNP has no hope of recovery.

FYI I currently hold albeit at a loss of 28% at the moment. I was hoping of a recovery due to the fact that the monies are continuing to roll in.

Any opinions on the chances of Pelorus getting the votes to take over the management rights. On paper they dont look big enough to manage the 12 syndicates that they want but given the fear and panic that sets in when people smell blood in the water they could just swing the vote.

SEMPER UBI SUB UBI


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## zebop (27 February 2008)

*Centro Properties Group Gee Westfield?*

Todays news: Westfield Group (WDC), the world’s top shopping mall owner, reported its full year results. Net profits dropped 38% in 2007!

Well even so called low debt companies are feeling the pinch not just CNP due to the USA market?


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## ghostworld (27 February 2008)

A quick look at the WDC presentation shows that a major reason for this decrease is due to a large positive property revaluation in 2006. Otherwise there 's only a small decrease to their income from 06 to 07.


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## wilko66 (28 February 2008)

From that bastion of financial reporting the Herald Sun, a brief review of the Pelorus move and it's chances....slim at best...of acquiring control of MCS.

http://www.news.com.au/heraldsun/story/0,21985,23286784-664,00.html?from=public_rss


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## moneymajix (28 February 2008)

Rocket... CER up 65% on report out this morning...

Great stuff...can't keep up...


CNP UP 12%


Watch it go...


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## ghostworld (28 February 2008)

Sold my CER and bought CNP with the proceeds today. Hoping for a gain in CNP SP tomorrow. Wish I hadn't sold half my CER holdings yesterday.


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## gfresh (28 February 2008)

From reuters:

At least four mull bids for Australia's Centro-WSJ
Thursday February 28, 2008, 3:58 pm


SYDNEY, Feb 28 (Reuters) - At least four companies, including U.S. private equity firm Blackstone Group BX.N and a unit of General Electric Co GE.N are considering bids for Australia's Centro Properties Group CNP.AX, the Wall Street Journal reported.

In an article on its Web site citing people familiar with the matter, the paper said Australian property firm Mirvac Group (ASX: MGR.ax) and Malaysian conglomerate Mulpha International MITC.KL were also likely to bid for a controlling stake.

Centro Properties, one of Australia's biggest casualties of the global credit crunch, got into trouble when it borrowed heavily using short-term debt to finance long-term investments. It owns 700 shopping malls in the United States.

It has won an extension on a total of A$5.4 billion ($5.1 billion) in debt till April 30, but is still under pressure to sell assets to raise cash by the new deadline.

Its shares have fallen about 90 percent since it first revealed debt problems in mid-December.

The paper said Blackstone and GE declined to comment, while Mirvac and Mulpha did not immediately return messages seeking comment.

It said other bidders were also likely to emerge, and Centro would collect formal bids within several weeks. ($1=A$1.06) (Reporting by Jonathan Standing)


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## Trojax (28 February 2008)

Very good news for CNP with CER release, Rufrano's performance was excellent.. the question from the 'Australian' reporter.. ahh not so excellent LOL, doofus.

Throw in market spec on takeover rumors and if the 6 month report is relatively 'reasonable' given market conditions, some of us who've been buying in over the last few months despite the beating they've taken in the press might be in for finally a little sunshine.

Not sure how many holders there are left in here LOL, so quiet considering the events of today. I'd think people would be quite more upbeat


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## traderboy (28 February 2008)

Well I am in at 54cents, missed the boat a little bit on this one, but hopefully the trend continues as the outlook doesn't seem as bad as first thought!


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## ghostworld (28 February 2008)

I bought a few back when it was .65. Been in the red since. Bought some more today around .57. 

Hoping that all the bad news already been aired out. I guess the only thing that can still go wrong is if the bank decides to call in the debt. Doesn't seem likely at this stage.


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## Trojax (28 February 2008)

traderboy said:


> Well I am in at 54cents, missed the boat a little bit on this one, but hopefully the trend continues as the outlook doesn't seem as bad as first thought!




Lol re missed boat, I just happened to buy my first tranche _the day before_ the last trading halt at .89c which I think was 3-4 days before the first big dump to 40 something when the market went skewiff for a day 

Since then bought 3 more tranches in the low 50's at the dips, very happy now with entry price overall.


----------



## traderboy (28 February 2008)

Trojax said:


> Lol re missed boat, I just happened to buy my first tranche _the day before_ the last trading halt at .89c which I think was 3-4 days before the first big dump to 40 something when the market went skewiff for a day
> 
> Since then bought 3 more tranches in the low 50's at the dips, very happy now with entry price overall.




LOL - 89cents yuck!!! How about CER, that was a big mover today! Would like to see how it goes tomororow!


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## moneymajix (28 February 2008)

In.

Why not?


Yep, CER report today resulted in some wonderous moves in CER.


Next, CNP tomorrow.


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## traderboy (28 February 2008)

moneymajix said:


> In.
> 
> Why not?
> 
> ...




Quite possibly! We shall see ! Not sure of how each others change in share price affects each other though


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## Trojax (28 February 2008)

traderboy said:


> LOL - 89cents yuck!!! How about CER, that was a big mover today! Would like to see how it goes tomororow!




I'm guessing day traders and movers made their $ on CER today, 30 opn 60 high to 41 close is insane, lol, maybe pulled their money back out closer to close and will pump into CNP tomorrow to get a double kick, thats not including insto's and others getting in the mix. It's fun riding the rollercoaster 

89c on one of the 4 tranches isn't so bad, the others outweight it considerably, think of the poor guys paying over a buck in Jan or the peeps burned in December, anyone on here a holder from December?


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## vida (28 February 2008)

Am feeling very warm about CNP lately and ever since they crashed and I purchased at .66 cents - wish I'd waited longer and picked same up in .30 cent range even 40 or 50 (anything lower of course) but that's the way it worked out. I do believe in CNP and of course it may not work out, but am in!

I can see now where I could have sold on spikes and bought back in on the dips but hey isn't it so easy to see retrospectively, hindsight is such a wonderful asset but we only get it when its too late to use it . . damn

hehe... if only the market was not so unpredictable and then we would all sleep well every night and be as wealthy as we wanted to be and not have to do anything we didn't want to do, we could have everything we want  ..

I am a bit risk averse lately so don't know what I am doing with this stock seeing as there is so much uncertainty around it, but there is a good chance it will live and thrive and please all its holders even those who bought in 2007


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## vida (28 February 2008)

traderboy said:


> LOL - 89cents yuck!!! How about CER, that was a big mover today! Would like to see how it goes tomororow!




Looking at how CER did today it would not surprise me if CNP SP hits above 89cents tomorrow ... if it does i will sell and celebrate  .. even though I would love to hold on longer, the risk and uncertainty is maybe not my cup of tea

But then again.... fortune favours the brave 

The higher the risk the higher the reward

Nothing ventured nothing gained


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## Quixis (29 February 2008)

vida said:


> But then again.... fortune favours the brave
> 
> The higher the risk the higher the reward
> 
> Nothing ventured nothing gained




ROFLOL... 

How many Brave souls have lost their lives?

How many high risks have resulted in total lost?

Sometime venturing ends in disaster. Just look at Mt Everest!


Now is this realistic or "Glass half empty" thinking?  LOL


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## ghostworld (29 February 2008)

Wow,

A lot of daytraders would have been hurt today. 5% drop in SP after market close bringing it to a total 20% drop. I bought this stock at around .59 yesterday. 

I intend to hold it for 6 months to 1 year depending on whether or not they go bust or get bought out.

Not sure exactly what the market was spooked about today. Revenue was in line with their muted expectations. The banks didn't charge higher interest or fees for extending the loan. This is really good news as it shows that all the banks are co-operating. The big hit was from revaluations of assets. I would have thought that this was already priced in the SP. 

This revaluation would definately have an effect to the ord minnett Jan 09 valuation of $2.90 that was also posted here in the last 2 weeks. Would appreciate it if that poster can post the updated research when they release it. Oh and if you believe the wall street journal article then there are at least 4 buyers interested in either part of the whole centro business. 

This stock will be very interesting in the next 2-4 weeks when most would have completed their initial due dilligence.


----------



## lingqi (29 February 2008)

Hi everyone, I am new here. I just wonder why the half year result of CER  came just one day earlier than it of CNP. Since they belong to the same group, were they supposed to be released on the same day? 

I bought CNP@0.50 and would like to hold until 30th April.


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## godzillaismad (29 February 2008)

lingqi said:


> Hi everyone, I am new here. I just wonder why the half year result of CER  came just one day earlier than it of CNP. Since they belong to the same group, were they supposed to be released on the same day?
> 
> I bought CNP@0.50 and would like to hold until 30th April.




Hello Lingqi, welcome to ASF!

In answering your question, CER is a separate company to CNP, although CNP has a majority in the company's stake. So CER is quite independent of CNP in regard to announcements and such.

Hope I answered your question. 

Cheers!


----------



## vida (29 February 2008)

I'm holding too, was prepared to sell today on a big spike which didn't eventuate but I was not disappointed at that.  I think that the announcements today really should not have surprised most people. All those negativities were already factored into the recent SP movements and were reason why its fallen approx 96% from $10 etc. Where it has been in past few weeks whether up or down is unbelievably cheap considering its obvious business viability. 

I think its worth taking a risk on this one and it will be incredibly interesting to see what happens at end of April and following months.  The CEO of debt defying mistakes has departed and the new leader seems to be doing a pretty good job.  In fact new leadership is what is going to save Australia  & USA in more ways than one .. 

cheers to a better future



lingqi said:


> Hi everyone, I am new here. I just wonder why the half year result of CER  came just one day earlier than it of CNP. Since they belong to the same group, were they supposed to be released on the same day?
> 
> I bought CNP@0.50 and would like to hold until 30th April.


----------



## Aussie2Aussie (2 March 2008)

lingqi said:


> I bought CNP@0.50 and would like to hold until 30th April.




April 1 would be a better date to aim for.

The only traders that are making money out of CNP or CER is the big end of town, while the mug punter keeps proping the price up. I have yet to see one piece of good news out of these guys in 3 months.

CER - what was it, a $216 million loss. Thats good news..and the shares were supposed to go ballistic?


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## ghostworld (2 March 2008)

Aussie2Aussie said:


> April 1 would be a better date to aim for.
> 
> The only traders that are making money out of CNP or CER is the big end of town, while the mug punter keeps proping the price up. I have yet to see one piece of good news out of these guys in 3 months.
> 
> CER - what was it, a $216 million loss. Thats good news..and the shares were supposed to go ballistic?




Those information should already be priced into to the SP. Most people would be more concerned about their solvency status. Though still on 'a short leash from the bankers', all info coming out in past months indicate that the banks are going to allow Centro management to restructure in a timely manner.

So if you believe that Centro's bankers wont pull the plug then you would at least value CNP at around Book value. Even with the reported $1 bil loss, the book value is much higher than then current SP. The SP won't increase by much in a hurry until Centro is some ways into the restructuring process.

Fast gains can be achieved if one of those interested buyers makes a market offer for Centro. I wouldn't bank on this. CNP is still a risky Buy and hold investment but i'm more confident in them than i was 2 months ago.


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## ghostworld (2 March 2008)

CER related article for the forum's interest:

http://www.bloomberg.com/apps/news?pid=20601081&sid=aJf9a7InNkDs&refer=australia




Centro Retail Shares Surge, Venture Loss Capped (Update2)

By Laura Cochrane

Feb. 28 (Bloomberg) -- Centro Retail Group, a property trust whose parent company needs to refinance A$4.9 billion ($4.6 billion) of debt, rose the most in a month in Sydney trading after announcing the maximum it can lose from a U.S. venture.

The trust can lose no more than $1.2 billion from its investment in Super LLC, a venture that runs many of Centro's U.S. malls, Chief Executive Officer Glenn Rufrano said today on a conference call. Super LLC has liabilities of $5 billion, Melbourne-based Centro Retail said.

Centro Retail, which has $1.1 billion of debt it must repay to U.S. creditors by Sept. 30 at the latest, has been tarred by the plunge in the value of its parent company. Centro Properties, the Australian owner of more than 700 U.S. malls, has lost 90 percent of its value since saying in December it was struggling to raise funds amid the global credit squeeze.

``In revenue and cash-flow terms the business is going well even though there have been some negative valuations,'' said John Snowden, who manages the equivalent at $6.9 billion as head of property securities at Colonial First State in Sydney, including Centro Properties stock.

Debt Struggles

The trust rose 9.5 Australian cents, or 30 percent, to 41 cents at the 4:10 p.m. Sydney-time close on the Australian Stock Exchange, the most since Jan. 25. The stock earlier soared as much as 90 percent. Centro Properties, which reports first-half earnings tomorrow, gained 15 percent to 57.5 Australian cents.

The limit on Centro Retail's possible loses through Super LLC is the ``most significant piece of new information'' from the results, said James Cornell, an analyst at Goldman Sachs JBWere Pty who has a ``hold'' recommendation on the shares. The trust's investment equals 57 cents per unit of A$1.65 net tangible assets as of Dec. 31, Rufrano said.

Centro Retail has dropped 70 percent since Dec. 17, when Centro Properties announced the group's debt struggles.

``If you are wounded people will try to eat you, people believe Centro is wounded but we will cure ourselves,'' Rufrano said today.

Blackstone Group LP, General Electric Co.'s real estate unit, Mulpha International Bhd's Australian business and Mirvac Group may bid for Centro Properties, the Wall Street Journal reported today, citing people familiar with the matter.

Jim Kelly, a spokesman for Centro, declined to comment. , Georgia Sloane, a spokeswoman at Mulpha in Sydney and Kate Lander, spokeswoman for Mirvac in Sydney, also declined to comment. After- hours calls to John A. Ford, a spokesman for Blackstone in New York, weren't immediately returned and a representative at General Electric in Melbourne didn't return messages.

Centro Retail Loss

Centro Retail's net loss totaled A$260.8 million in the six months ended Dec. 31, compared with a profit of A$41.9 million a year earlier, the company said today in a statement. The trust's $6.6 billion U.S. portfolio declined 3 percent.

``Mums and dads in the U.S. are likely to start making the choice to buy the basic shampoo rather than the super premium shampoo and when you multiply that by 300 million people it will make a difference to Centro,'' Mark Wist, director at Property Investment Research Ltd. in Melbourne, said yesterday before the result.

Super LLC is a joint venture between Centro Retail, Centro Properties and the Centro MCS 40 syndicate. It invests in 538 properties of which Centro Retail has interests in 161.

Super is the parent of Centro NP, which was created when Centro bought New Plan Excel Realty Trust for $5.2 billion in cash and assumed debt last year in the biggest U.S. acquisition by an Australian-based trust. Rufrano was CEO of New Plan at the time of the sale.

Centro Asset Sales

Centro Properties has been trying for two months to sell stakes in its funds, pay debt and persuade investors it should retain a A$26.6 billion collection of malls that stretches from Perth, Western Australia to Yonkers, New York.

It borrowed under former Chief Executive Officer Andrew Scott to buy $9 billion of malls over two years. Scott spun off the malls Centro bought into 34 property syndicates, three wholesale funds, two unlisted property funds and one listed property fund. Investors pooled money into those funds, allowing Centro to earn fees for managing the assets.

Rufrano said the ``current financial challenges faced by both Centro Retail Trust and Centro Properties Group at a corporate level are completely removed from the operational performance of the business''.

``Centro Retail's challenge is to solve the recapitalization of Super LLC,'' he said.

To contact the reporter on this story: Laura Cochrane in Melbourne at lcochrane3bloomberg.net.


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## Aussie2Aussie (2 March 2008)

ghostworld said:


> Those information should already be priced into to the SP. Most people would be more concerned about their solvency status. Though still on 'a short leash from the bankers', all info coming out in past months indicate that the banks are going to allow Centro management to restructure in a timely manner.
> 
> So if you believe that Centro's bankers wont pull the plug then you would at least value CNP at around Book value. Even with the reported $1 bil loss, the book value is much higher than then current SP. The SP won't increase by much in a hurry until Centro is some ways into the restructuring process.
> 
> Fast gains can be achieved if one of those interested buyers makes a market offer for Centro. I wouldn't bank on this. CNP is still a risky Buy and hold investment but i'm more confident in them than i was 2 months ago.




What the banks gave them was longer to dig themselves out of the hole they are in; but if they havent been able to do it by now, they probably wont, the share price reflects this.

Centros assets are going backwards in value every day this drags on and the banks, the ultimate owners, know this. Sure banks dont want to run shopping centres.....but then again they wont be distressed sellers and will get a much better deal out of the inevitable than Centro will.


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## ghostworld (2 March 2008)

Aussie2Aussie said:


> What the banks gave them was longer to dig themselves out of the hole they are in; but if they havent been able to do it by now, they probably wont, the share price reflects this.
> 
> Centros assets are going backwards in value every day this drags on and the banks, the ultimate owners, know this. Sure banks dont want to run shopping centres.....but then again they wont be distressed sellers and will get a much better deal out of the inevitable than Centro will.




These are valid factors that are still on a lot of people's mind. I do think that it would take at least 1/2 a year before they are well into the restructuring process. I disagree that banks would be able to get more value by liquidating Centro now. If anything that would lead to a fire sale. Centro still has a good cashflow and at this stage as long as Centro is allowed to trade and attempt to re-capitalise, the banks stand a better chance of getting their money back.

Hopefully now with the annual report out of the way, they will be able to provide the market with more information on the restructuring process. This is still a risky investment not for the nervous type. Even if CNP was able to restructure, I would expect the SP to reflect book value for quite sometime (years) before the market will return to a PE ratio based on other LPT's.


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## ricky0252003 (3 March 2008)

"_CommSec chief equities economist Craig James said the RBA's expected 25-basis points interest rate rise on Tuesday had already been priced in_"-afr 3/3/08

I hope the market will not plunge again at 2:30pm tomorrow. 

I've sold some of my mining shares today and bought more CNP, due to the expensive A$ and cheap U$D. It's a bit of gamble here. However, comparing with the rest of shares that suffered badly in the sub-prime, CNP is still on trading. Furthermore, it's operational part of business is looking good.


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## ghostworld (3 March 2008)

ricky0252003 said:


> "_CommSec chief equities economist Craig James said the RBA's expected 25-basis points interest rate rise on Tuesday had already been priced in_"-afr 3/3/08
> 
> I hope the market will not plunge again at 2:30pm tomorrow.
> 
> I've sold some of my mining shares today and bought more CNP, due to the expensive A$ and cheap U$D. It's a bit of gamble here. However, comparing with the rest of shares that suffered badly in the sub-prime, CNP is still on trading. Furthermore, it's operational part of business is looking good.




It's probably fair to say that the 3% plunge in the market today has priced in the next interest rate rise.


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## ricky0252003 (4 March 2008)

Thank god RBA didn't increase .5% this afternoon. It could be disatrous. One thing I can't figure out is what's going wrong with RBA? Can't they figure out all economic indicators are lag indicators, which is purely based on previous data. Those data may or may barely represent the breakout of sub-prime. Demand is low these days and ppl are driven out of their houses in syd. I really don't see much of inflation there but fear.

The gov, since the show pony got elected, became one of the most entertaining gov in the world. Kevin, the playboy, did all kinds of symbolic bs rather than something solid. He also praised himself due to his "excellent work". Following by the strip club issue, Rudd was questioned whether he's smoked pot? wtf

CNP is down pretty bad, worse than other companies at least.  Most of its short term debt bears no interest. I don't see why CNP dropped more than others.


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## vida (4 March 2008)

Really?  CNP short term debt bears no interest?  Can you explain that a bit more thanks.  Even so then the long term debt would bear a big interest rise and would not that explain the CNP drop?  However people are just selling pretty much across the board from what I can see, indiscriminately.  Fear..,




ricky0252003 said:


> Thank god RBA didn't increase .5% this afternoon. It could be disatrous. One thing I can't figure out is what's going wrong with RBA? Can't they figure out all economic indicators are lag indicators, which is purely based on previous data. Those data may or may barely represent the breakout of sub-prime. Demand is low these days and ppl are driven out of their houses in syd. I really don't see much of inflation there but fear.
> 
> The gov, since the show pony got elected, became one of the most entertaining gov in the world. Kevin, the playboy, did all kinds of symbolic bs rather than something solid. He also praised himself due to his "excellent work". Following by the strip club issue, Rudd was questioned whether he's smoked pot? wtf
> 
> CNP is down pretty bad, worse than other companies at least.  Most of its short term debt bears no interest. I don't see why CNP dropped more than others.


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## ghostworld (4 March 2008)

I didn't expect this share to be hit so much in the last few days. A lot of it's caused by the overall market falls. One concern with high interest rates is that property prices may come down (for australian assets). Also with the US now in a 'recession', there's a concern that the cashflow from operations may start to shrink. All of these impacts the SP but not to this extent. 

The SP levels for the past few months are based more on fears that CNP may collapse. It is very difficult to judge the reaction to a positive or negative variable on CNP's share price. 

Currently holding this for up to 6 more months unless there's more adverse news coming from the company.


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## ricky0252003 (4 March 2008)

Ghostworld made a few great points there. However, considering the residual of it's price drop, it's way below the market average and its sector average. Some factors that I suspect are if there's any correlation between ABS and CNP as well as the hedge and directors' little dirty secret(think about it, if I owe someone money that I can't pay at all, the only way that I can get myself out is to pretend to be financially healthy[using CER in this case] in order to buy more time to solve the problem, whether or not). Btw, if RBA is still questioning the inflation, they may possibly increase the interest rate again in may. I am looking to spec sell some of CNP after the company release how it will handle its debt problem. 

Things I do wish to see in the coming weeks are the bidders make their official bid on CNP; dividend from 22c distributable income. as a day trader, I won't hold it for long, coz CNP's been really disturbing, and I have to watch the shares at the same time of sitting a lecture sometimes. However, as soon as the price hit a certain level, it will drop. So I'd rather sell it high and buy it low. The outlook of CNP in 2 yrs is great, but CNP is taking up half size of my portfolio. I'd probably spec sell/buy to maximize the my profit.

Btw, I do expect some news(good or bad) released in the next 2-3 days


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## Trojax (5 March 2008)

Regardless of everything else, it's not in the creditors interests to not extend Centro a hand. Reality is, their into the locals for what 4 billion... as someone here said (or maybe another site)... you owed me 100 million.. its your problem.. you owe me 5 billion.. its my problem, lol. Be interested to know if their loaning the stock out lol.

Point being anyway Centro is solvent, it's meeting debt repayments and has good fundementals all things considered in a nasty market. Why on earth would the creditors want to wind them up, imagine what it would do to them in an already battered financial sector whose copping shorts enough already, it'd be financial disaster for them to call it in. And why would you, it's debt on the books making you money. Sure sure they could take control and all that and fire sale the assets, but in a depreciating market then to liquidate en masse??? Hell I'd be propping them up, take their cash, keep it on the books and ride it out, the reality is to call it quits = massive writedowns, massive shorting, massive losses.

Hell if I was a creditor bank I'd be accumulating if they owed me money, take the stock for nix, rewrite the debt when buy price was smashed (as it is) and profit on the rise in book value while retaining the income stream on loans.

I'm amazed no big player has stepped in to take over here, caps at what 330 million, and even at 70-75% gearing at recent revalue, thats many billions in profit for someone with the funds, just roll the company in a takeover, kick in the short term debt subsidised from their own equity then use the existing income streams to service it as they already are and ride it 12-18 months then sell it off piecemeal or keep for a cash cow. Centro's ripe for the picking, markets are bad, but if they fall over it's a free for all on the corpse, suprised no one wants to be the butcher and make the cuts of meat!

Guess everyones got problems at the moment, fears ruling the roost until the US situation is made clear, so much for our market being sheltered by the mining boom.


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## Bolivia (5 March 2008)

Trojax - You really do have to wonder why, the scenario you painted, has not unfolded. It makes so much sense to take a large equity stake, which has easily been possible given the trading volumes, and then make the banks happy by paying some of them off ie reduce gearing. Share price would then rise appreciably and your equity stake would look great. So why hasn't this happened? The banks cannot afford to have centro go down. The ripple effects from this would be so huge.

The fact that this scenario has not unfolded, is what makes buying into the shares so dicey. I have 3 answers as to why.

1. Fear - no one is willing to stick their neck out and take a punt. The enviroment we are in is just scaring the .... out of any potential suitors.

2. The company is just plain and simply F.....d.

3. It has already started to happen, but they have not disclosed their stakes in the company yet.

Points to note:

1. Banks WOULD refinance on attractive terms (long term basis with acceptable spread), if the company reduced it's gearing to an acceptable range.

2. The business IS cash flow positive.


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## vida (5 March 2008)

It was down to .30 cents earlier this year and shot up almost a day later to .78 cents - and now back to .30c levels a few weeks later. What can one say about that, it is just extraordinary volatility and it is scarey. It may even go down to .20 cent levels in coming days I would not be surprised now, but if it does it may be great buying opp but everyone will be too spooked to dip in  



ghostworld said:


> I didn't expect this share to be hit so much in the last few days. A lot of it's caused by the overall market falls. One concern with high interest rates is that property prices may come down (for australian assets). Also with the US now in a 'recession', there's a concern that the cashflow from operations may start to shrink. All of these impacts the SP but not to this extent.
> 
> The SP levels for the past few months are based more on fears that CNP may collapse. It is very difficult to judge the reaction to a positive or negative variable on CNP's share price.
> 
> Currently holding this for up to 6 more months unless there's more adverse news coming from the company.


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## ricky0252003 (6 March 2008)

The US and european markets show an uptrend this moring. It is expected that the aussie shares will recover a bit to last week's level by Fri.


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## vida (6 March 2008)

What about the raiders who are trying to take over management of one of the critical fee earning companies?  What will this do to CNP Sp?



ricky0252003 said:


> The US and european markets show an uptrend this moring. It is expected that the aussie shares will recover a bit to last week's level by Fri.


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## ricky0252003 (6 March 2008)

Anyone can explain the news in regard to Centro MCS. The announcement kinda confused me? I bought more this morning to cover the margin. Not sure what's gonna happen next


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## vida (6 March 2008)

Hard to know what's going to happen next, particularly when Glenn Rufrano refuses to comment when asked by the media about the raid by that "P"
company according to news reports today.  We are all travelling blind at present is how it feels to me with this one.  Oh well. What fun it is !! 



ricky0252003 said:


> Anyone can explain the news in regard to Centro MCS. The announcement kinda confused me? I bought more this morning to cover the margin. Not sure what's gonna happen next


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## ricky0252003 (6 March 2008)

Pelorus is trying to get the shareholders to divide part of CNP into the management of itself. but why? I am totally lost. Coz Pelorus also did something to CER and CER's price jumped 64%. Anyone pls explain wat's going on


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## ghostworld (6 March 2008)

ricky0252003 said:


> Pelorus is trying to get the shareholders to divide part of CNP into the management of itself. but why? I am totally lost. Coz Pelorus also did something to CER and CER's price jumped 64%. Anyone pls explain wat's going on




I'll try and explain it simply. Pelorus is not the reason for the share price increases.

Pelorus is trying to get shareholders or unit holders of MCS syndicates to replace Centro as managers of these entities. Centro earns management fees from these entities. With the current debt status of Centro, Cashflow is king. 

Pelorus has the backing of some of the shareholders. The size of the backing was enough for them to call a meeting where they will vote for the proposed changes listed on today's announcement. 

Pelorus is basically trying to steal a person's wallet after they have just been hit by a bus. 

I'm not sure of the impact on cashflow if they were to succeed. I'm also unsure as to pelorus's chances. Centro is a majority holder of these syndicates (28% according to the article) and will vote against this.


http://business.theage.com.au/pelorus-launches-attack-on-big-centro-syndicate/20080305-1x89.html


Pelorus launches attack on big Centro syndicate


    * Eli Greenblat
    * March 6, 2008
    *

CENTRO Properties Group's grip on its lucrative stable of property syndicates was severely weakened last night when Pelorus Property Group won enough shareholder support to challenge Centro's control of a $232 million investment vehicle.

It is the third and biggest to date of Centro's 36 syndicates to be raided by the Sydney-based Pelorus, which will ask unit holders to remove the debt-ridden Centro as manager at a meeting slated for April 10.

Pelorus and other potential raiders threaten to punch a hole in Centro's already shaky balance sheet by grabbing the management rights and the fees that flow from them. For the half-year, Centro posted revenue of $255.8 million, of which about $70 million was sourced from acting as the responsible entity and manager of its property syndicates. The syndicates have a combined value of more than $8.5 billion.

It comes as media-shy Centro chief executive Glenn Rufrano held a series of meetings yesterday with analysts who still cover the company, taking questions on its recent profit result. Centro last week unveiled a $1.1 billion loss for the first half, as a result of big write-downs and a drop in the value of its shopping centres.

Through an alliance with New Zealand financial services group Money Managers, Pelorus has secured enough unit holder support to call a meeting to dislodge Centro as the manager of MCS 19 NZ/I, which owns shares in Australian shopping centres totalling $23.7 million, and MCS 16, which owns the $35 million Centro Toormina in NSW.

Pelorus said last night investors holding 12.7% of MCS 11 had rallied to call for a meeting next month where they would seek to reduce the management fees linked to the syndicate and replace Centro with Pelorus as the manager.

MCS 11 owns the Paradise Centre in Surfers Paradise, a property recently valued at $232 million. The property, whose main tenant is Woolworths, was bought eight years ago for $88 million. It has been one of the best-performing syndicates for Centro, with units tripling since inception to $3 just recently.

It is estimated that Centro earns about $1 million a year in fees from MCS 11 and — like its other funds — is entitled to property management, performance, rollover and wind-up fees. Centro has mooted changes to this structure that could add other fees.

Pelorus chief executive Stuart Brown said it was in the best interests of investors to separate the management of Centro MCS 11 from Centro and its funding issues.

"Clearly, Centro has issues which have already affected these syndicates," he said. "By their own admission, the hedging situation could increase interest costs and reduce net asset backing, and separating the management from Centro's problems is the safest route for investors."

He rejected suggestions Pelorus did not have the experience to run the syndicates, arguing it had arranged and managed syndicated property investments for more than 10 years.

Centro has a 28% stake in the syndicates and will use it to defeat the resolution. Pelorus says Centro is not entitled to vote and it could take action to block Centro from voting. Mr Rufrano declined to comment.


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## sonicwind (6 March 2008)

Pelorus gained support from enough shareholders...so what can these shareholders gain from the deal??? lower cash flow certainly won't help SP


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## ghostworld (6 March 2008)

sonicwind said:


> Pelorus gained support from enough shareholders...so what can these shareholders gain from the deal??? lower cash flow certainly won't help SP




Enough support to hold a meeting. Doesn't mean they have enough vote to win. MCS syndicates shareholders and CNP shareholder's interest may not be aligned.


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## Trojax (6 March 2008)

DEBT-LADEN shopping centre empire Centro may be able to block property minnow Pelorus' attempt to seize a key investment syndicate.

Pelorus yesterday formalised its bid for management of MCS 16, one of 10 syndicates it plans to take over.

But Centro holds a near-blocking stake in that syndicate, and Pelorus must clear steep voting hurdles if it is to grab control of MCS 16 and the other nine syndicates.

Pelorus, which yesterday announced a net profit of $3.2 million for the half year, is mounting the raid at the request of controversial New Zealand financial advisers Money Managers, which tipped its clients into the syndicates.

Control of the MCS syndicates would boost the funds Pelorus controls from about $500 million to about $1.5 billion.

For each fund, Pelorus requires 50 per cent of syndicate members to approve its proposal before it can replace Centro as responsible entity.

Pelorus yesterday officially called a meeting of investors in MCS 16, a syndicate which owns the $36.9 million Toormina shopping centre in New South Wales.

In a letter sent to investors yesterday, Pelorus said investors who did not vote would be "supporting Centro as the manager of your investment and, potentially, the retention of the existing high fee structure."

Pelorus managing director Stuart Brown declined to rate his company's chances of seizing control of the MCS syndicates.

"I reckon it's too early for us to put chances on it," he said.

Mr Brown said Pelorus had no debt on its balance sheet and the $150 million owed by individual bankers could not be sheeted home to the company.

"The bank has loaned to the project -- if the project goes t1ts up the bank's security is the project only," he said.

He said a 2 dividend would be paid in scrip because the company needed liquidity to snap up distressed properties thrown up by the volatile market.

"The more cash we've got in the business the more quickly we can respond to opportunities."

Centro spokesman Jim Kelly said the company's Diversified Property Fund was considering how to use its 28 per cent share of MCS 16.

"DPF's view is that it does have voting rights over its interest in MCS 16, which stands at 28 per cent of the fund," he said.

If Pelorus succeeds in its bids to control the MCS syndicates, it has agreed to pay Money Managers a trailing commission.

Earlier this month, New Zealand barrister James MacFarlane announced he was preparing a class action against Money Managers over $NZ457 million lost by 7000 investors in the company's First Step funds, closed in October 2006.

In 2002, the New Zealand Securities Commission banned a mortgage investment scheme run by Money Managers because the company was not properly registered.

http://www.news.com.au/heraldsun/story/0,21985,23286784-664,00.html


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## ghostworld (6 March 2008)

Trojax said:


> "The bank has loaned to the project -- if the project goes *t1ts up* the bank's security is the project only," he said.
> 
> 
> http://www.news.com.au/heraldsun/story/0,21985,23286784-664,00.html




Had to check the original article and yeah it does say '*t1ts up*'. Lol. They need to proof read some of this before they post.


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## Trojax (6 March 2008)

ghostworld said:


> Had to check the original article and yeah it does say '*t1ts up*'. Lol. They need to proof read some of this before they post.




If the journo quoted him Verbatim can't blame them for printing a 'turn of phrase', though not the wisest choice of words by someone trying to pull off a multi million dollar deal lol

Sounds like a guy selling real estate with waterfront views of Lake Eyre


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## ghostworld (6 March 2008)

Trojax said:


> If the journo quoted him Verbatim can't blame them for printing a 'turn of phrase', though not the wisest choice of words by someone trying to pull off a multi million dollar deal lol
> 
> Sounds like a guy selling real estate with waterfront views of Lake Eyre




Yeah wouldn't have to much confidence with Pelorus if the manager actually said that in the interview.


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## vida (6 March 2008)

HMmmm, very questionable this Mr Brown!!!

"Pelorus chief executive Stuart Brown said it was in the best interests of investors to separate the management of Centro MCS 11 from Centro and its funding issues".  IN BEST INTERESTS OF PEROLUS AND STUART BROWN NO DOUBT !!

"Clearly, Centro has issues which have already affected these syndicates," he said. "By their own admission, the hedging situation could increase interest costs and reduce net asset backing, and separating the management from Centro's problems is the safest route for investors." SAFEST ROUTE .. WHAT A SPRUIKER!  WHY DO THEY WANT TO AND NEED TO STEAL CNP IF THEY ARE SUCH  SAFE AND BETTER MANAGERS ?  THIEVES NEVER PROSPER. 

He rejected suggestions Pelorus did not have the experience to run the syndicates, arguing it had arranged and managed syndicated property investments for more than 10 years.    TEN YEARS SO WHAT!! WHO EVER HEARD OF THEM BEFORE NOW? 

Centro has a 28% stake in the syndicates and will use it to defeat the resolution. Pelorus says Centro is not entitled to vote and it could take action to block Centro from voting. Mr Rufrano declined to comment.   USURPING LIKE A DELUSIONAL AND MEDIOCRE PIRATE - PROBABLY GOT THIS IDEA FROM SOME HALF BAKED LAWYER. MAYBE HE MEANS HE WILL STEAL THEIR PENS SO THEY CAN'T VOTE 

I THINK THIS PELORUS AND MR BROWN WILL GO t1ts UP... talks like a sleazebag and who can trust someone who spruiks like that.. yUK



ghostworld said:


> Yeah wouldn't have to much confidence with Pelorus if the manager actually said that in the interview.


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## ProRip (6 March 2008)

mmm. well im new at shares and stocks, I am considering buying my 1st set of stocks and I have been watching centro for 3 months now tempted to by while low, now that this PELORUS deal has come about would it be a good time to do a 50/50 investment on each stock so that if one loses the other should cover any financial loss?


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## ghostworld (6 March 2008)

ProRip said:


> mmm. well im new at shares and stocks, I am consider buying my 1st set of stocks and I have been watching centro for 3 months now tempted to by while low, now that this PELORUS deal has come about would it be a good time to do a 50\50 investment on each stock so that if one looses the other should cover any financial lose?




I believe Centro holds MCS syndicates in both CER and CNP. Unsure of the weighing on either of these stock. So you're not really hedging there. Even so, It doesn't seem likely that Pelorus will be able to get enough votes to remove Centro as the managers.

Due to the complex structure, if the banks pull the plug on CNP, CER will also go down. The only difference i can think of is that CER's debt obligation is limited to $1 billion something. 

It looks like the SP may have hit a floor yesterday. Management has been awfully quiet about their restructuring process or progress so i don't expect much of an increase in SP until they improve their communications to the market.


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## ricky0252003 (7 March 2008)

Email replied from Centro

Hi Rick,

Thank you for your enquiry.

We appreciate your desire for additional information. The Strategic Review is currently underway and covers virtually all key aspects of our operations. Centro and its related entities will continue to meet their disclosure obligations. Unfortunately at this stage we are unsure when the next announcement will be.
If you have any further queries, please contact Investor Services on 1800 802 400 or email investor@centro.com.au. 
Kind regards, 
Alicia on behalf of the Investor Services Team
| Centro Investor Services | Centro Properties Group |
| Toll Free: 1800 802 400 | Fax: +61 3 8847 1868 | 
| www.centro.com.au | investor@centro.com.au |
| Corporate Offices, 3rd Floor | Centro The Glen | 
| 235 Springvale Rd | Glen Waverley VIC 3150 |


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## ricky0252003 (7 March 2008)

If CNP doesn't release any announcement today(friday), I suspect CNP's SP will go under 0.3. The US market is down pretty bad right now. The only reason CNP has a $0.01 yesterday wasdue to the commodity, and banking sector. 

Really don't want to see this happening but greater profit always come with greater risk. 

I think we have to hang on there and have some faith.


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## ghostworld (7 March 2008)

ricky0252003 said:


> If CNP doesn't release any announcement today(friday), I suspect CNP's SP will go under 0.3. The US market is down pretty bad right now. The only reason CNP has a $0.01 yesterday wasdue to the commodity, and banking sector.
> 
> Really don't want to see this happening but greater profit always come with greater risk.
> 
> I think we have to hang on there and have some faith.




The major reasons for the fall in SP was due to several brokers putting a 'Sell' rating on CNP. I can't remember where I read this from. I read several papers in a given day. 

I haven't read the actual broker reports so I don't know what the justifications are for 'sell' rating now as opposed to 2-3 months ago. Spooked by the accounting losses i imagine. I'm sceptical of broker's in general. They don't make money by investors holding on to shares. They want you to churn and trade daily.


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## Aussie2Aussie (7 March 2008)

ProRip said:


> .......would it be a good time to do a 50/50 investment on each stock so that if one loses the other should cover any financial loss?




No way, you would still be risking the lot.

Never ceases to amaze me how despite the fact that these shares reach new lows week after week and at the same time more and more bad news piles up yet people still think that they can pick when it has bottomed.

The bottom probably is 0.0c.


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## nioka (7 March 2008)

ghostworld said:


> The major reasons for the fall in SP was due to several brokers putting a 'Sell' rating on CNP. .



That is as good a reason as any to buy. They get it wrong more than I do and I'm often wrong. I'll hold any way. As they say "in for a penny, in for a pound". They are just covering their backsides, if they say buy and it falls they get a lot of flack.


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## ricky0252003 (10 March 2008)

Weak Fri always lead to a weak Mon. US market is down badly, so Monday is expected to be down unless new announcement is made.


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## ricky0252003 (10 March 2008)

Those who've got guts should call the price now. I think .31 is the lowest CNP can go before 30 Apr.


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## moneymajix (10 March 2008)

*Re: CNP - Centro Properties Group UP*

33.5c, up 8%

From AFR, 10th March 2008 
p20,_Street Talk_


The deep-pocketed Abu Dhabi Investment Authority (ADIA) has been thrown up as a potential saviour of the Centro Properties Group as the ailing trust seeks to secure a bail-out by the end of next month.
Street Talk previously outed Mirvac Group as a player in the impending transaction and others like Stockland and Macquarie Group could have more than a passing interest.
Centro has debts of $3.9bn to be refinanced as part of a recapitalisation due by April 30 and is being advised by Lazard Carnegie Wylie.
ADIA has been making its presence felt in global markets, particularly when it comes to distressed companies requiring an injection of capital, for example its $US7.5bn ($8.1bn) investment in US bank Citigroup.
The sovereign fund has been looking at buying property in Brisbane and is said to be on the lookout for an office block in Sydney. In January the fund spent $156.5 million on a 19.9 per cent stake in New Zealand-listed AMP New Zealand Office Trust.


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## ricky0252003 (10 March 2008)

Bought more at .32. Don't know if I made a stupid decision or not. Hopefully it's not another bear trap.


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## nioka (10 March 2008)

ricky0252003 said:


> Those who've got guts should call the price now. I think .31 is the lowest CNP can go before 30 Apr.



 I doubt that it needs intestinal fortitude to call a price,unless you mean that by calling a price you may get a well deserved caution from the mods. Price today only matters to those needing to sell and for traders. What matters is what the price will be at the end of April. I'm continuing to hold as I think that the current management will get this one back on track. (unless they have huge margin loans as per Eddy Groves). But then if they did they would have been called in long before now.


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## ricky0252003 (10 March 2008)

According to AFR, PPI tries to raid CNP by taking over the management of Centro MCS. However CNP owns 28% of the stakes. In order to successfully get control over Centro MCS, PPI needs a vote that is greater than 75%. PPI and CNP may appear in court in the coming weeks. PPI will argue the conflict of interest and CNP should not be able to vote on the units. Whereas, CNP will argue the units are technically owned by the Diversified Property Fund, which has a right to vote. 

Anyone got any idea or expectation in regard to the outcome. I consulted one of my lawyer friends in brisy. I was told there's a 50/50 chance.


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## ghostworld (10 March 2008)

ricky0252003 said:


> According to AFR, PPI tries to raid CNP by taking over the management of Centro MCS. However CNP owns 28% of the stakes. In order to successfully get control over Centro MCS, PPI needs a vote that is greater than 75%. PPI and CNP may appear in court in the coming weeks. PPI will argue the conflict of interest and CNP should not be able to vote on the units. Whereas, CNP will argue the units are technically owned by the Diversified Property Fund, which has a right to vote.
> 
> Anyone got any idea or expectation in regard to the outcome. I consulted one of my lawyer friends in brisy. I was told there's a 50/50 chance.




They are dreaming if they think that they can stop Centro from voting. If it were that easy to take control of management rights, then you would see much bigger players doing what Pelorus is attempting to do now. You may as well kiss goodbye to all current management models. ie. Macquarie, Babcock and Brown, etc etc.


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## Quixis (11 March 2008)

*Re: CNP - Centro Properties Group UP*



moneymajix said:


> 33.5c, up 8%
> 
> From AFR, 10th March 2008
> p20,_Street Talk_
> ...




And my grand mother's church group is another being thrown up as a potential saviour.

Then there's Santa of course also.

Stick to the facts, not a journo's rubbish imo.


----------



## moneymajix (11 March 2008)

*Re: CNP - Media*

Q



> Quote:
> Originally Posted by moneymajix
> 33.5c, up 8%
> 
> ...





If you believe the journalist is being misleading then maybe you might like to contact one or all of the following:
AFR,
ASIC,
the media regulator.


Good luck to your grandmum's group.


You must be a caring sort of person.


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## Trojax (13 March 2008)

News worthy of noting, Romano Nenna CFO (on medical leave since early Jan), has officially been replaced as CFO by Tony Clarke. (Ivan St Clair was interim, ex ernst and young partner), resolves an issue relating to credibility (same as when Scott got flicked) for potential suitors or refins. Dead wood chop IMO.

http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00822376

Also Pelorus raid on MC16 shot to shat IMO by new bank finance condition on development $ that MCS retain control, unless Pelorus has a third party rabbit here they're dead in the water. Interesting the lender stipulates Centro retain control as a condition of the bucks, hedging also sorted here at the same time.

No news on CAF or CAWF, but certainly movement behind the scenes in terms of resolving secondary distractions compared to the short term refin issue.

Oh also Globus took a 5% stake in CER, relevent or not to CNP given their 50% interest will tell with time.


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## ricky0252003 (16 March 2008)

Another investment bank in the states went bust. It will put pressure on the credit market and real estate sector. Some economist predicted 700,000 household in australia will feel the mortage pressure in June. 

CNP appointed new CFO in a urgent manner "effetive today". 

I think CNP will go down for another 7-8% on Monday if no announcement released


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## Quixis (17 March 2008)

Hi all, can someone explain what's happening with CNP.

There are continued buys being made. Figures like 4,627, 7,627 etc. Now these are bot buys and they've been happening for weeks now. Last week it was parcels of 1062, 1082.

Are these day traders do you think? Or what is the strategy happening here?

Thanks


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## lingqi (17 March 2008)

Here is recent news, what will happen to SP?

Centro Suitors Macquarie, Mirvac Abandon Bid Plans, Review Says 

By Laura Cochrane

March 17 (Bloomberg) -- Macquarie Group Ltd., Mirvac Group and Lend Lease Corp. Ltd. are among potential suitors of Centro Properties Group who will abandon bids this week, the Australian Financial Review reported. 

Centro may fail in its attempts to sell equity to new or existing shareholders and the company likely will be divided up by creditors, the newspaper said, citing a person who had examined the Melbourne-based company's books. 

Blackstone Group LP also may walk away from a potential bid after saying fourth-quarter profit dropped 89 percent and Abu Dhabi Investment Authority isn't considering a bid, the newspaper said. 

Centro, the owner of more than 670 U.S. malls, must refinance A$4.9 billion ($4.6 billion) of debt by April 30. Centro's banks include JPMorgan Chase & Co., BNP Paribas SA and Commonwealth Bank of Australia. 

To contact the reporter on this story: Laura Cochrane in Melbourne at lcochrane3bloomberg.net. 

Last Updated: March 16, 2008 19:19 EDT


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## vida (17 March 2008)

That is very bad news and indicates the company will fold up soon and naturally so will the SP.  However this article is not an announcement by the company, its a journalist sensationalising some comment someone made to her. The article says Centro MAY fail in its attempts etc.. but we already knew it 'may' fail, this is not to say that it will fail. We have to wait to hear from Rufrano and the new CFO as to what is really going to occur.  




lingqi said:


> Here is recent news, what will happen to SP?
> 
> Centro Suitors Macquarie, Mirvac Abandon Bid Plans, Review Says
> 
> ...


----------



## ricky0252003 (17 March 2008)

There are rumors flying everywhere in the market these days. The reason for that is FEAR. Bear Stearn's collapse causes impact on investors' confidence to a certain extent. short-selling frequently occurs these days. It is hard to verify the credibility of any media.


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## vida (17 March 2008)

At least the journalist provides her email address if anyone wants to question the validity of her article.  It worked on me, i cancelled my buy order topping up my existing CNP holding which is looking at 50% paper loss at present. The risk suddenly seemed too enormous to buy any more of it.



ricky0252003 said:


> There are rumors flying everywhere in the market these days. The reason for that is FEAR. Bear Stearn's collapse causes impact on investors' confidence to a certain extent. short-selling frequently occurs these days. It is hard to verify the credibility of any media.


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## sonicwind (17 March 2008)

This may very well be true - it's been a month since the extension of the refinance deadline, if there was any interested buyer, shouldn't someone have some move by now?? Also Centro's dataroom was open a lot earlier than that.

with worsening global credit conditions and continued lack of positive announcement by centro, i am beginning to think i have taken a wrong punt, the lack of bidding means buyers want to get cheaper bargains at a fire sale.


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## yang (17 March 2008)

somehow I remain optimistic  

what is the scenario if cnp does go bust? do shareholders have limited liability?

yang


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## ricky0252003 (17 March 2008)

Greater return comes from greater risk taking. The journalist only wrote what she thinks "it's supposed to be" There's no solid evidence back up what she's saying. 

I am not saying CNP will definitely get out of trouble here. However I can see that investors' confidence is going down because people are not thinking rationally these days and short-selling players are taking advantage of this kind of mentality.

If the share gets bust, well, you lose all the money; if CNP get out of its debt, I will be sure the SP will go up close to its bookvalue. We are making a decision based on -$ or at least $$$$. opportunity cost guys. Before buying this share, you have to ask yourself, do you trust the management or not?


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## oldblue (17 March 2008)

I would suggest that there is a lot more to the CNP situation than whether or not one trusts the management. An awful lot could happen that is completely outside their control.

Incidentally, call me naive, but I can't imagine investing in a company in which I had reason not to trust management.


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## qr2007 (17 March 2008)

Money is yours and decision is yours too.

If you are not sure about the company with too many hidden issues then "void" it. There are plenty of clear, good ones around.

I entered when it was over $1, have lost 15% on this. Lucky I jumped out before. otherwise it would be BIG loss for me.


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## lingqi (17 March 2008)

In the current situation, is it safer to buy CER instead of CNP? 

If CNP solved its debt fanacing problem, SP of CER would roket as well I believe. If CNP went bust, CER at least has net assets. 

What do you think, guys? By the way, I sold all the CNP today which I lost 30% on it. I am very very sad!


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## ricky0252003 (17 March 2008)

CER and CNP are co-investing companies. You are asking "can I still play footy if one of my legs has been chopped off". 

Sharemarket in general is not safe. There is no absolute. I'd say buy a property if u've got cash. Coz the price is low right now. with the population growth rate currently, it will go up in a few years.

I don't see CNP's debt problem is caused by the management. Sub-prime punished all high gearing level companies in general. The management didn't make any major mistakes (the auditor Pwc skrewed up the balance sheet) . You can't blame the management on an unexpected "natural disastor".


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## vida (17 March 2008)

CNP are fighting the Pelorus takeover raid of another of their managed fund companies from which they earn millions in management fees.  If they are fighting hard as they are then it seems they feel they still can solve their problems and keep CNP going.  If the management felt it was all hopeless and they have all the information we do not have, then they would just advise the shareholders to agree to a management takeover as a solution.  This is not what they are doing but conversely they are advising holders in no uncertain terms that they are the superior manager and to keep them on. This tells me that CNP is struggling but have no intention of throwing in the towel and there is plenty of time for them to resolve these issues.  This week is the last week for any bidders/investors to show their hand and we will know by the end of the week what the mid to long term outlook is i think. The down trending SP this week reflects the negativity of the media and the market but this does not mean that the week will end in bad news. Wait & see


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## sonicwind (17 March 2008)

the only positive thing i can think of now is recently there has been no CNP announcement of "xxxx ceasing to be a substantial holder" 

i am going to hold onto my shares and see to the end of this


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## ricky0252003 (17 March 2008)

Some brokers are paying the media to write bad news and they can play short-selling behind the scene and make profit.


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## vida (17 March 2008)

The thing there is that the substantial holders did all their ceasing a while ago. Are there any substantial holders now?  We may be in quicksand with this one you know. I am going to sleep on it and decide by end of the week if I cut my losses or hang in there for the duration.  Its a hard decision to make.



sonicwind said:


> the only positive thing i can think of now is recently there has been no CNP announcement of "xxxx ceasing to be a substantial holder"
> 
> i am going to hold onto my shares and see to the end of this


----------



## Trojax (17 March 2008)

vida said:


> The thing there is that the substantial holders did all their ceasing a while ago. Are there any substantial holders now?




In late December there were:

ING 8%, CBA 6.42%, Deutsche Bank 5.8%, Barclays 5.14%, UBS came and went quick, MCQ was out mid December, but checking through notifications of ceasing I can only find the UBS and Barclays in 08, CBA, ING, Deutche Banks still on the books? Somone with a better account at their brokers might have access to this info.


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## ricky0252003 (18 March 2008)

Citicorp Nominees Pty Limited 63,789,464 7.55 
30/08/2007 Citicorp Nominees Pty Limited (CFS Wsale Property SECS A/C) 58,987,043 6.98 
30/08/2007 J P Morgan Nominees Australia Limited 111,724,817 13.22 
30/08/2007 National Nominees Limited 96,368,284 11.40 
30/08/2007 HSBC Custody Nominees (Australia) Limited 137,356,600 16.25 
21/01/2008 Commonwealth Bank Group 84,808,967 10.04 
13/11/2007 Macquarie Group Limited 48,724,197 5.76


----------



## ricky0252003 (18 March 2008)

lingqi said:


> In the current situation, is it safer to buy CER instead of CNP?
> 
> If CNP solved its debt fanacing problem, SP of CER would roket as well I believe. If CNP went bust, CER at least has net assets.
> 
> What do you think, guys? By the way, I sold all the CNP today which I lost 30% on it. I am very very sad!




I've predicted a loss around 7-8% for the comming day last night(check my previous post) due to the bear stearn. It's your money and your decision. CNP will go down for another 2 weeks. 

Only 2.75b is due in April. The news posted early today is aimed to create fear in decent investor community and help those DH make profit by short-selling


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## Trojax (18 March 2008)

ricky0252003 said:


> I've predicted a loss around 7-8% for the comming day last night(check my previous post) due to the bear stearn. It's your money and your decision. CNP will go down for another 2 weeks.
> 
> Only 2.75b is due in April. The news posted early today is aimed to create fear in decent investor community and help those DH make profit by short-selling




Hi Ricky, how do you know CNP will go down for the next 2 weeks (mind you probably every stock will LOL). This week I believe is the close out for official offers, guess see what happens.

I'm not sure how you get 2.75b due end of April, I thought it was nearly 4.9 billion or so?

As for Laura Cochrane article well, if do a quick google she's been on the job for bloomberg online since Nov 06, about 14 months in an online division if this is correct, 4 years at RMIT 99-02, I also found a site (Cant relocate) with most her articles, 75%+ I'd say were all about Centro, not a rocket scientist to recount rumor and innuendo especially if trying to make a name for yourself. My opinion is if your going to write articles, quote the source, if not, it's nothing but hearsay or using a source who won't go on the record is as good as rumour mongering, that's not reputable journalism and reckless IMO unless all sources can be verified pubicly. We wouldn't tolerate a poster here making unsubstantiated claims, amazes me that journalists can. Not saying she 'may' be right, who knows, but it stinks to me that can be presented that way.

The market is brutal at the moment, Centro is silent, you know it could go either way IMO, though I doubt the Aust lenders will in the event of lack of CAF\CAWF sale or an equity offer let them go as long as Rufrano has the restructure in debt clarity he's been touting ready in place by end of April. It would destroy the lenders in this climate to let Centro which is a profitable on -going concern go under due to what is a capitalisation issue, which again, IMO while CNP are servicing the existing debt without any issues they'll survive this at least to the Sept date set out by the US lenders, the big question to me is debt servicing, if Centro can show it's no issue I can see them riding it out provided the lenders don't panic like the market has, this market is shattered, Centro are paying the lenders good money why not milk it, see if they can ride it, at the point their looking like can't pay the interest, then close it up, for the moment that's not happening.


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## lingqi (18 March 2008)

I do hope Centro can get out his trouble, here is an interesting news!

Centro Bid List May Include Macquarie, Blackstone, Review Says 

By Jacob Greber

March 18 (Bloomberg) -- Centro Properties Group hopes to draw up a short list of potential suitors this week that may include Macquarie Group Ltd. and Blackstone Group LP, the Australian Financial Review said. 

First round offers are due this week and Macquarie hasn't been ruled out as a possible bidder, the newspaper reported without saying where it got the information. Executives from Blackstone may have been in Australia last week, the Review said. 

Blackstone may consider taking part in a recapitalization of Centro, or buy assets from its banks, the newspaper said. 

Centro, the owner of more than 670 U.S. malls, must refinance A$4.9 billion ($4.5 billion) of debt by April 30. Centro's banks include JPMorgan Chase & Co., BNP Paribas SA and Commonwealth Bank of Australia. 

To contact the reporter for this story: Jacob Greber in Sydney at jgreber@bloomberg.net


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## vida (18 March 2008)

That is not good news, recapitalisation would be the best outcome for shareholders but buying assets from its banks implies the company is in liquidation mode and taken over by the creditors. The market does not like is as the SP is diving more this morning.  I wish CNP would announce something positive quickly, they are being far too quiet and silence can mean anything.


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## Trojax (18 March 2008)

vida said:


> That is not good news, recapitalisation would be the best outcome for shareholders but buying assets from its banks implies the company is in liquidation mode and taken over by the creditors. The market does not like is as the SP is diving more this morning.  I wish CNP would announce something positive quickly, they are being far too quiet and silence can mean anything.




Funny part is the article is totally opposite another reporter from the same source AFR\Bloomberg yesterday, tells me they dont know either for fact anyway on anything lol, depending on who you read or talk to.


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## theedge (18 March 2008)

vida said:


> That is not good news, recapitalisation would be the best outcome for shareholders but buying assets from its banks implies the company is in liquidation mode and taken over by the creditors. The market does not like is as the SP is diving more this morning.  I wish CNP would announce something positive quickly, they are being far too quiet and silence can mean anything.




So what is the brutal honest truth for a share holder currently holding this stock?

I foolishly purchased this stock at 0.45, hoping that as this company had valuable assets in Australia and a bunch of tennants who were not suddenly going to pull out of their shopping centres that they would be able to survive the current market volatility.  

Having witnessed what has happened to Bear Sterns over the past 72 hours I am no longer so sure.


----------



## ghostworld (18 March 2008)

theedge said:


> So what is the brutal honest truth for a share holder currently holding this stock?
> 
> I foolishly purchased this stock at 0.45, hoping that as this company had valuable assets in Australia and a bunch of tennants who were not suddenly going to pull out of their shopping centres that they would be able to survive the current market volatility.
> 
> Having witnessed what has happened to Bear Sterns over the past 72 hours I am no longer so sure.




I wouldn't worry yet until they make some sort of announcement. I bought in at a much higher SP than what we've seen in the last 2 weeks. If a recap scenario is unveiled with financial backing then we are likely to see a doubling or tripleling of the SP. 

The risk with selling now is the chance that the stock goes into suspension due to recap or buyout announcement. If this occurs then you may have missed the boat. A few articles have pointed out that the bids are due before easter. So it is possible that the SP goes into a trading halt or suspension while Centro analyses the different offers. I suspect the offers will be mostly from overseas entities. Macquarie Bank may be the only exception. A likely scenario is a cashed up property investor recaping the company and take a controlling stake of Centro. Overtime they will sell the property assets in a more stable market. Blacktstone will probably take it private. I don't see a passive investor taking a stake in this. 

I would argue that nothing has really changed since the annual report was released. The SP movement in the last few weeks was driven by fear due to the general market sentiment. Centro is a high risk investment maybe some have only just begun to realise that now? A lot of the movement can be guessed by using the Beta on the company. (it was around 2 last i checked, this probably hasnt been updated for a while from Commsec). This means that if the market moves down 3% then we are likely to see CNP go down by 6%. 

Anyone else had a laugh at the Pelorus reply to Centro's letter? It's like watching a current affair show.


----------



## vida (18 March 2008)

Yes there will probably be an announcement on Thursday, Friday being a holiday.  I sold this morning as I got too nervous with the SP plunging. At least I won't have to pay CGT now. hmmm. But i may buy in again before end of the week just to stay in at a lower SP, it all helps if I risk even just bit less




ghostworld said:


> I wouldn't worry yet until they make some sort of announcement. I bought in at a much higher SP than what we've seen in the last 2 weeks. If a recap scenario is unveiled with financial backing then we are likely to see a doubling or tripleling of the SP.
> 
> The risk with selling now is the chance that the stock goes into suspension due to recap or buyout announcement. If this occurs then you may have missed the boat. A few articles have pointed out that the bids are due before easter. So it is possible that the SP goes into a trading halt or suspension while Centro analyses the different offers. I suspect the offers will be mostly from overseas entities. Macquarie Bank may be the only exception. A likely scenario is a cashed up property investor recaping the company and take a controlling stake of Centro. Overtime they will sell the property assets in a more stable market. Blacktstone will probably take it private. I don't see a passive investor taking a stake in this.
> 
> ...


----------



## sonicwind (18 March 2008)

Regardless of the outcome of the battle over MCS16, i admire the efforts Pelorus has put in, Centro on the other hand has been rather disappointing...


----------



## ricky0252003 (18 March 2008)

According to AFR, CNP was the most traded stock with 40.4mil shares changing hands worth 10mil. 

Based on what you see and what ghost said, there seems to be new announcement released soon. I expected the announcement being made on Thur right before the market closes. 

I've just got a reply from CNP investor centre to clarify the debt issue. 

Dear Rick,

Thank you for your enquiry regarding Centro Properties Group (CNP).

According to our financial results for the half year ended December 2007, CNP has debt of $4.197 billion maturing 30 April 2008. The additional $1.217 billion is relating to Centro Retail Group’s (CER) maturing debt. Please note that these entities are separate.

If you have any further queries, please contact Investor Services on 1800 802 400 or email investor@centro.com.au. 

Kind regards, 

Angela on behalf of the Investor Services Team

You can compare this article with 

MELBOURNE (Dow Jones)--Centro Properties Group (CNP.AU), an Australian property trust struggling to refinance about A$5.4 billion in maturing debt, Wednesday named Tony Clarke as its chief financial officer effective immediately. 
Clarke, who has 29 years' finance and treasury experience, will oversee the company's treasury, tax and financial accounting functions, the firm said in a statement. 
He had previously worked for auto parts maker Pacifica Group Ltd. and packaging company Amcor Ltd., Centro said. 

-By Andrew Harrison, Dow Jones Newswires; 61-3-9671-4323; andrew.harrison@dowjones.com 

(END) Dow Jones Newswires 
March 12, 2008 02:14 ET (06:14 GMT) 
Copyright (c) 2008 Dow Jones & Company, Inc. 


The media is trying to create fear. According to AFR short-selling has reached history high.


----------



## vida (18 March 2008)

We dont' really know what centro have been doing but am certain they are working hard on it.  I sold my stake in CNP this morning in a fit of pique, that is when I make the mistakes - when I let my emotions rule.  I am buying back in the morning and hopefully won't be a sore loser this week. gosh



sonicwind said:


> Regardless of the outcome of the battle over MCS16, i admire the efforts Pelorus has put in, Centro on the other hand has been rather disappointing...


----------



## ricky0252003 (19 March 2008)

Nasdaq opened high today. There's an expectation of .75% rates cut by US fed. The expectation has already been placed in the market. Hopefully it will recover investors' confidence for a bit

Aussie market is likely to open high if nothing destructive happened overnitght. CNP is likely to go to 0.29 tomorrow.


----------



## Sean K (19 March 2008)

ricky0252003 said:


> Aussie market is likely to open high if nothing destructive happened overnitght. CNP is likely to go to 0.29 tomorrow.



It just absolutely beats me why people persist with placing arbitrary price targets for stocks at ANY time. Might as well just go down the casino and spin the wheel. Geeeshh!!


----------



## yang (19 March 2008)

kennas said:


> It just absolutely beats me why people persist with placing arbitrary price targets for stocks at ANY time. Might as well just go down the casino and spin the wheel. Geeeshh!!




Every time he puts the kiss of death on cnp he seems to be right....  lets see if it goes both ways. ---> unless there is an announcement I see little reason for a rise


----------



## vida (19 March 2008)

I think it will rise today. I sold yesterday feeling fed up with it but its my fault for watching it every day.  Then I bought back a 50% bigger holding this morning - its a smaller risk now and I have taken care of CGT issues for the year by selling at a loss yesterday so I think I have it all covered. I have a good positive feeling about CNP overall and hopefully great news next week

However I only have good feeling about it coming from buying in today but not if I had bought in last year and was still holding.  I know there are many people like that and god help them, hopefully it wasn't their life's investment.  For me this is just a fabulous break if it works out but if not I still have a job, my portfolio otherwise is doing ok considering the market and I have cash




yang said:


> every time he puts the kiss of death on cnp he seems to be right....  lets see if it goes both ways. ---> unless there is an announcement I see little reason for a rise


----------



## ricky0252003 (19 March 2008)

kennas said:


> It just absolutely beats me why people persist with placing arbitrary price targets for stocks at ANY time. Might as well just go down the casino and spin the wheel. Geeeshh!!




I assume that's the MRTA investment style? Wish u good luck in the casino. btw CNP did go up this morning. 0.275 at high


----------



## Julia (19 March 2008)

ricky0252003 said:


> Some brokers are paying the media to write bad news and they can play short-selling behind the scene and make profit.




What evidence do you have of this?
If you are going to make statements like that you need to provide proven examples of what you are talking about.


----------



## ricky0252003 (19 March 2008)

From the CEO's letter. Seems CNP is unlikely to make a new announcement this week

The recapitalisation process is on track with a high degree of interest and ongoing support of
the lenders. Various datarooms are open with companies representing both local and offshore
interests granted access in order for them to undertake due diligence. Once formal bids are
received and evaluated, the Board will have the necessary information to determine the optimal
strategy in the best interests of all Centro stakeholders. I will provide you with a further update
on the process at that time.


----------



## Sean K (19 March 2008)

Julia said:


> What evidence do you have of this?
> If you are going to make statements like that you need to provide proven examples of what you are talking about.



Thanks for picking this up Julia.

Ricky do you have any proof of this incredible claim?

If not, then you can not post such things on ASF.

Cheers,
kennas


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## ricky0252003 (19 March 2008)

Julia said:


> What evidence do you have of this?
> If you are going to make statements like that you need to provide proven examples of what you are talking about.




Check the top of the page u see what I mean. The media said CNP has 5.4b debt. what the media did mean is that CNP and CER(even tho they are co-investing companies)have a combined debt of 5.4b. Don't u think it's a bit misleading? In regard to media being paid to write bad news, it's just suspicion under current circumstances.

btw, even if I know some "examples", I won't tell u for legal purposes. the reason ppl come here is to make money rather than taking a journalism lecture. This is not the States, and there's no freedom of speech. however u can be charged for defamation. U don't wanna get into court to find yourself some trouble even tho u've got the evidence.


----------



## yang (19 March 2008)

but isnt cer about as useful as a bull with t1ts if cnp goes belly up? so cer's debt may as well be cnp's? or am I completely wrong?


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## ricky0252003 (19 March 2008)

yang said:


> but isnt cer about as useful as a bull with t1ts if cnp goes belly up? so cer's debt may as well be cnp's? or am I completely wrong?




According to our financial results for the half year ended December 2007, CNP has debt of $4.197 billion maturing 30 April 2008. The additional $1.217 billion is relating to Centro Retail Group’s (CER) maturing debt. Please note that these entities are separate.

According to ICAI, it is not possible. Otherwise, the only way to make CER's debt into CNP's debt is to make internal trasactions. Directors must act on the best interest of the company. Directors may breach their duties by doing so according to Corps ACT 2001.


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## ricky0252003 (19 March 2008)

kennas said:


> Thanks for picking this up Julia.
> 
> Ricky do you have any proof of this incredible claim?
> 
> ...




I love ur MRTA's style of comment "If not, then you can not post such things on ASF." Please understand some australian law at least. 

The person who can sue for defamation are those who considers damage to their reputation has or is likely to occur, as a result of material published, may sue the publisher/s of the material. (http://www.efa.org.au/)

I can argue it is a fair comment. and I used the word "some" rather than a particular person.


----------



## Sean K (19 March 2008)

ricky0252003 said:


> I love ur MRTA's style of comment "If not, then you can not post such things on ASF." Please understand some australian law at least.
> 
> The person who can sue for defamation are those who considers damage to their reputation has or is likely to occur, as a result of material published, may sue the publisher/s of the material. (http://www.efa.org.au/)
> 
> I can argue it is a fair comment. and I used the word "some" rather than a particular person.



Ricky your comment was the equivalent of posting a rumour IMO which is not permitted on ASF. It's got nothing to do with defamation, or whatever you're inferring. 

See the policy here. 

Thank you for your cooperation.


----------



## ricky0252003 (19 March 2008)

kennas said:


> Ricky your comment was the equivalent of posting a rumour IMO which is not permitted on ASF. It's got nothing to do with defamation, or whatever you're inferring.
> 
> See the policy here.
> 
> Thank you for your cooperation.




How can u say it's rumor and how can you justify it since I declared that it's just my suspicion. It's called personal opinion in my situation therefore it doesn't have to be verified. You can take it seriously if you want otherwise you can take a look at it and have a laugh

btw price hit .29 at high, someone said "persist with placing arbitrary price targets for stocks at ANY time".


----------



## Sean K (19 March 2008)

ricky0252003 said:


> How can u say it's rumor and how can you justify it since I declared that it's just my suspicion. It's called personal opinion in my situation therefore it doesn't have to be verified. You can take it seriously if you want otherwise you can take a look at it and have a laugh
> 
> btw price hit .29 at high



In regard to the price, it's irrelevant. Please don't post any random price targets without some reasonable FA, or TA. 

On looking back at your post, what you have actually done is post a lie.



ricky0252003 said:


> Some brokers are paying the media to write bad news and they can play short-selling behind the scene and make profit.



You only corrected yourself when it was picked up by Julia. Thank you for doing so, but please do not post such speculation without clarrifying at the time that it is just your opinion that brokers are bribing the media and breaking God knows what laws. Then we can have a decent laugh. Thank you.


----------



## Trojax (19 March 2008)

In Ricky's defence here by the same token then I say stop posting media articles that don't have verified sources or details backing up their commentary, it's just third party posting and akin to using someone elses name to make a claim that equally is unsubstantiated... 

Case in point is the 2 articles out of Bloomberg from 2 different reporters, one basically saying everyone's out, the next saying some same name players are still in, how can that be seen as being acceptable...

Personally I take Ricky's post as an opinion, he has done some diligence such as contacting CNP etc, so that's making an effort. As to hitting an exact price, well yeah should at least have a one liner in there saying why with a bit of detail, though anyone buying off a forum hit price anyway would be a bit of duffer lol

Keep posting Ricky and DYR, unduly harsh getting called a liar for an opinion, but again, that's another persons opinion. LOL, love the irony of forum posting


----------



## Joe Blow (19 March 2008)

Trojax said:


> In Ricky's defence here by the same token then I say stop posting media articles that don't have verified sources or details backing up their commentary, it's just third party posting and akin to using someone elses name to make a claim that equally is unsubstantiated...
> 
> Case in point is the 2 articles out of Bloomberg from 2 different reporters, one basically saying everyone's out, the next saying some same name players are still in, how can that be seen as being acceptable...
> 
> ...




Trojax,

This statement:



ricky0252003 said:


> Some brokers are paying the media to write bad news and they can play short-selling behind the scene and make profit.




is completely unacceptable on this forum unless Ricky is prepared to back it up with some evidence. It is not stated as an opinion, it is clearly stated as fact.

As for posting price targets, this forum has clear rules that price targets must be accompanied by analysis. Like it or not, those are the rules here and price targets posted without some kind of analysis will be removed.

Moderators are here to enforce forum rules and that is what Kennas has done in this instance. If you (or anyone else) would like to discuss it with him I am sure he would be happy to do so via PM.

Now lets get this thread back on topic.


----------



## ricky0252003 (19 March 2008)

Why should I give details on how I predicted the price? It's like being a lawyer, I can tell a client the likely outcome of a particular case, but if the client wants to seek for further legal advice, they have to pay. I am not saying I want to charge people or watever. I am just saying how I did the analysis is my business. Whether u take my opinion is your business. 

Why there are so few ppl giving good suggestions? It's all becoz of u admin kids who deleted others message and accuse them as "liars"


----------



## Trojax (19 March 2008)

Joe Blow said:


> This statement: Quote:
> Originally Posted by ricky0252003 View Post
> Some brokers are paying the media to write bad news and they can play short-selling behind the scene and make profit.
> 
> ...




Ahhh I see, fair enough yeah I didn't read into that line fully, can see the issue, sorry! Though I don't like the media much I wouldn't go that far 

Yeah back on topic, anyone care to make commentary then on todays bounce, the cause, the volume (wow!) at this point and if it's just a correlation with the XAO or due to Rufrano's letter to stakeholders yesterday after close... or are we seeing heavy short buy ups to cover positions 

Also does anyone know the exact date COB the shortlist is due out this week?


----------



## Joe Blow (19 March 2008)

ricky0252003 said:


> Why should I give details on how I predicted the price?




Because the accompanying analysis is the difference between some thought having gone into the price target and it simply being plucked out of thin air.

I could say CNP will go to $1 tomorrow but without analysis the price target is meaningless.

It you are not willing to abide by the forum rules then perhaps you should find another forum to post at.

Now as I said, lets get this thread back on topic. If anyone wants to discuss forum rules further than contact Kennas or myself via PM.


----------



## nioka (19 March 2008)

ricky0252003 said:


> Why should I give details on how I predicted the price? It's like being a lawyer, I can tell a client the likely outcome of a particular case, but if the client wants to seek for further legal advice, they have to pay. I am not saying I want to charge people or watever. I am just saying how I did the analysis is my business. Whether u take my opinion is your business.
> 
> Why there are so few ppl giving good suggestions? It's all becoz of u admin kids who deleted others message and accuse them as "liars"



 Give it up ricky. Rules are rules. It is Joe's rules and supervision that makes this the best forum around.


----------



## moneymajix (19 March 2008)

*Announcement*


_Initial Substantital Shareholder Notice_


Vanguard Australia Investments

17 March



http://www.vanguard.com.au/



> Funds under management  A$1.5 trillion worldwide
> A$69 billion in Australia
> Number of investors  More than 22 million worldwide
> Number of funds  140+ in US
> ...






Looks like they have bought at much higher share price in the past.


Closed 30c
Volume - over 50 million


----------



## Trojax (19 March 2008)

This is great news for holders and accumulators 

Given the disclosure letter is 17th, they very well could have been accumulating a much larger stake with the nearly 100 million shares sold between yesterday and today. Tomorrow should I'd imagine see some strength on the back of the announcement and hopefully a bit more info, I for one am excited!

Gotta love the guessing games going on in the news media, no one saw this coming, this proves again only those behind closed doors know what's really going on until they make it 'official'


----------



## vida (19 March 2008)

CNP is looking more positive again compared with yesterday at least but not compared with months ago of course. It is still a gravely endangered species.

I sold my holding at .26c yesterday on a fear impulse then the SP dived to its lowest ever - 23c! I relaxed being out of CNP and gave myself a night to think and sleep on it then this morning I bought back my previous holding plus 50% more at .266. 

I wish I'd dived in at .25cents today and even 23c yesterday. I had to take time to think first and then the SP was up. We get no time to ponder with such volatility. He who hesitates is lost i suppose  Also we have other things to do than watch the screen all day

I can't imagine how day traders get through day by day of just sitting at their screen making these buy/sell decisions for a living :  I would be stressed and some nights sleepless - not a life for me


----------



## DionM (19 March 2008)

vida said:


> I can't imagine how day traders get through day by day of just sitting at their screen making these buy/sell decisions for a living




The money probably helps them sleep 

Interesting times for CNP.  I topped up my holdings last week at around 30c.  Still not a substantial holding  - I am still treating it like I would treat a speculative miner.  I have been resisting buying more, I have rules about maximum exposure to a certain stock so it has been hard not wanting to buy more as the price dropped (having said that, if I didn't have my rules I would have been topping up all the way down, so I'm still better off).

I'm in CNP for the long term.


----------



## Trojax (20 March 2008)

vida said:


> CNP is looking more positive again compared with yesterday at least but not compared with months ago of course. It is still a gravely endangered species.
> 
> I sold my holding at .26c yesterday on a fear impulse then the SP dived to its lowest ever - 23c! I relaxed being out of CNP and gave myself a night to think and sleep on it then this morning I bought back my previous holding plus 50% more at .266.
> 
> ...




Hey Vida, you've been on this ride same as myself and others I guess, sticking to the basic premise that underlying value remained intact, how good was your rethink timing lol! I know it's been a terrible ride for the longies but hopefully this is the first sign of the behind the scenes players showing their hands in an official sense. I even wonder on the last 2 days if there's not more than one mixing it up here, Vanguard already had a stake from November but not sure on what %, the trading shows the last 2 days that either they or someone else is buying up, perhaps their increasing holdings, perhaps someone else also taking a position in anticipation of a refin deal from themselves (double dipping) or even a takeover. It makes sense if someone like Vanguard was going to front the 5 billion that they take a stake and capitalise on the rise in share price as a bonus imo.

I like you increased my stake on 17th very substantially @.25, lol I felt somewhat nausous hovering over that buy button lol, DCA is down to .35 now, still just out of the money after 7 consecutive pickups, still looking at it as an LT, hopefully the ann and some more substantial debt resolution in the coming weeks will translate into stability and growth for the 12-36 monthers like me 

(I too reckon DTrading is a killer way to make a living, talk about heart attack material lol, I can say I'm sure I'd blow a valve on this market lol!. I do what I do best, make money on industry deals, live simple and basic despite income, invest long term, and stay away from drugs LOL).


----------



## ghostworld (20 March 2008)

moneymajix said:


> *Announcement*
> 
> _Initial Substantital Shareholder Notice_
> 
> ...




I always thought that Vanguard only provides index linked managed funds products. Looks like they are custodians as well. The biggest holder from that annexure was JP Morgan with 33,789,888 shares in CNP. JP Morgan is already on the substantial holder list. 

Reading into the CEO's letter, I get the indication that they will try to run an orderly review of the bids. Doesn't look like they will go into a trading halt until they make a decision sometime in the future (I guess late next month). CNP's actions since the ordeal doesn't appear desperate. Compare this with ABC learning who immediately made a deal with JP morgan to offload 60% of the US assets. There is no way to determine if it was a good deal or not until the details are sorted out. In my opinion the deal could have only been in the favour of JP morgan. Eddy made a quick announcement before they have determined the details of the deal just to save himself from a margin call (He failed in that attempt anyway and lost everything).

Hopefully information through the media or CNP announcement will provide us with more details. I would love to know who the bidders are, what they are bidding and how much they are bidding in the coming weeks.


----------



## vida (20 March 2008)

Hey Trojax:  What you just described would be insider trading a criminal offence so I doubt if that is the scenario with this big buying lately.  Vanguard may simply want a significant controlling interest in CNP and with their past very expensive holding, it makes sense they would be very concerned with what is happening to the company.  I think they want to have influence with CNP management & buying massive amounts of shares would give them that. Its all about protecting their investment and of course making more money.  As they look after their interests a side effect is that it benefits us as well (i hope)



Trojax said:


> I even wonder on the last 2 days if there's not more than one mixing it up here, Vanguard already had a stake from November but not sure on what %, the trading shows the last 2 days that either they or someone else is buying up, perhaps their increasing holdings, perhaps someone else also taking a position in anticipation of a refin deal from themselves (double dipping) or even a takeover. It makes sense if someone like Vanguard was going to front the 5 billion that they take a stake and capitalise on the rise in share price as a bonus imo.


----------



## Trojax (20 March 2008)

vida said:


> Hey Trojax:  What you just described would be insider trading a criminal offence so I doubt if that is the scenario with this big buying lately.  Vanguard may simply want a significant controlling interest in CNP and with their past very expensive holding, it makes sense they would be very concerned with what is happening to the company.  I think they want to have influence with CNP management & buying massive amounts of shares would give them that. Its all about protecting their investment and of course making more money.  As they look after their interests a side effect is that it benefits us as well (i hope)




It's an interesting question overall but is legit, eg CBA are both a stakeholder and debtor, as is JP Morgan (who was the main stakeholder in the Vanguard purchase, Vanguard simply acting as an investment agent). Heaps of companies banks or creditors are players on both sides as the lender and a holder. As to how they 'seperate' those interests I couldn't say, perhaps someone here with legal expertise or knowledge on this could explain how they do it.


----------



## ghostworld (21 March 2008)

Trojax said:


> It's an interesting question overall but is legit, eg CBA are both a stakeholder and debtor, as is JP Morgan (who was the main stakeholder in the Vanguard purchase, Vanguard simply acting as an investment agent). Heaps of companies banks or creditors are players on both sides as the lender and a holder. As to how they 'seperate' those interests I couldn't say, perhaps someone here with legal expertise or knowledge on this could explain how they do it.




There's meant to be a 'chinese wall' between the investment team and the lending team. ASIC and ASX rules applies here and they are not meant to be disclosing confidential information from one side to the other. As long as they are trading without insider knowledge then there should be no problems. In practise, I think one side would know exactly what the other knows. I don't think they would be stupid enough to blatantly break this rule. I don't see anything wrong with the recent buying or selling by the banks.


----------



## yang (21 March 2008)

has anyone any guesses why centro closed @ 2.10 yesterday? I cant find any info / announcements anywhere...


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## oldblue (21 March 2008)

yang said:


> has anyone any guesses why centro closed @ 2.10 yesterday? I cant find any info / announcements anywhere...




I thought the whole market closed early for Easter.

Must say I didn't follow closely - too busy getting away for Easter!


----------



## ghostworld (21 March 2008)

yang said:


> has anyone any guesses why centro closed @ 2.10 yesterday? I cant find any info / announcements anywhere...




No new announcements. Only thing I read in AFR was that there are 6 international bidders involved. Sounds like it will be an offer for the whole group as opposed to parts of Centro's business (Wholesalefunds).


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## Trojax (21 March 2008)

ghostworld said:


> No new announcements. Only thing I read in AFR was that there are 6 international bidders involved. Sounds like it will be an offer for the whole group as opposed to parts of Centro's business (Wholesalefunds).




Think he meant 2:10pm 

http://www.asx.com.au/about/operational/trading_calendar/asx/2008.htm

9. Normal trading ceases at 14:10 (Sydney time)


----------



## metric (24 March 2008)

centro told to sell assets

http://www.businessspectator.com.au/bs.nsf/Article/Centro-told-to-sell-assets-D22DD


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## vida (24 March 2008)

Wow this is a big feature in the business news today.  At least we discover in there somewhere that Rufrano has been busy in USA this weekend trying to work things out sacrificing his easter break with his family no doubt. We would never otherwise know anything is afoot as CNP management is not making any press releases to assuage shareholders etc. and keep SP steady.

I think it will be ok as the banks are showing quite a lot of restraint and patience, supporting CNP's attempts, pressuring a bit of course only natural as I would to a debtor. The bank's depend on CNP survival as well as CNP depends on the banks so this co-dependancy of these two powerful entities will lead to a good outcome the only question is when will it all happen.

The sooner the better I believe and hope so.  It could all end badly too but this is not the most likely outcome - what do you think?




metric said:


> centro told to sell assets
> 
> http://www.businessspectator.com.au/bs.nsf/Article/Centro-told-to-sell-assets-D22DD


----------



## ghostworld (24 March 2008)

metric said:


> centro told to sell assets
> 
> http://www.businessspectator.com.au/bs.nsf/Article/Centro-told-to-sell-assets-D22DD




The original article is available at SMH.com.

------------------------
Centro told to sell assets

    * Carolyn Cummins and Danny John
    * March 24, 2008

BANKERS to the debt-ridden Centro Properties Group are pressing the shopping centre owner to speed up the sale of key assets to bring down its mountain of liabilities as the company fast approaches its debt re-financing deadline.

The Herald understands the group's lenders and bondholders met Centro's recently appointed US chief executive, Glenn Rufrano, in San Francisco at the weekend, updating them on its plans to restore financial confidence in its business.

These included finding buyers for Centro's stakes in its US and Australian unlisted funds that own significant chunks of its retail centre property portfolio and an equity injection into the main group itself.

But it is understood that the banks, which are owed almost $4 billion in short-term debt, of which at least $2 billion loaned by its Australian lenders needs refinancing before April 30, want to see a greater commitment towards more asset sales.

The secret Easter meetings were held as Mr Rufrano considers offers for Centro's share in the two wholesale funds. But institutional investors said last week they held little hope that any firm bids had been proffered to the group.

Brokers said although four parties - Mirvac, Mulpha, GE Capital and Blackstone - had expressed interest in conducting further due diligence on the business, they were not necessarily the frontrunners.

The deadline for expressions of interest in the two funds was last week.

Mr Rufrano issued a statement last Wednesday saying various data rooms were open, with companies representing local and offshore interests granted access in order for them to undertake due diligence.

"Once formal bids are received and evaluated, the board will have the necessary information to determine the optimal strategy in the best interests of all Centro shareholders," Mr Rufrano said.

Unwillingness on the part of potential buyers for Centro's holdings in the funds, of which the group intends to hang on to the management rights, and its plunging share price are said to be complicating the negotiations over the company's future.

Its securities closed last week at just 27.5c, giving it a market capitalisation of $232.4 million, a far cry from its $6.9 billion value only six months ago.

Centro is also having to re-organise its debt repayments at a time when the global credit crisis has pushed up the price of servicing new loans to stratospheric levels above the official cash rate.

The prospects for the disposal of its US shopping centre business, whose debt-backed acquisition last year helped trigger Centro's financial crisis, is being further undermined by the US economy's plunge towards recession.

The company's bankers are said to be still keen to avoid putting Centro into administration given that its complex management and financial structure will take time to unwind and even longer to produce enough cash to go around.

Nonetheless, Centro's competitors and potential buyers have all said they would prefer to buy separate assets rather than what is currently being offered.

http://business.smh.com.au/centro-told-to-sell--assets/20080323-2147.html

---------------------------

I read that article titled 'Centro told to sell assets' and thought 'so what's new?'. 

The American bankers have extended till sept and Australian bankers have extended only until the end of April. The article tries to confuse this point to sensationalise their story. I think by April management will have enough time to analyze the bids and make an announcement if they are going to get anything close to fair value. The more pressure from banks the less likely they are going to get closer to fair value. So I wonder where SMH got their info from?

Reading into the article it seems like the head of property journalist for SMH had gotten her information from institutional investors and not from bidders or CNP themselves.


----------



## metric (24 March 2008)

either the banks want to be kept more in the loop or the article was written to cause emotion amongst shareholders ?

or the author had nothing else to write.


----------



## Trojax (24 March 2008)

The lenders\banks are in the loop, it's the media whose been 'cut out', hence their mentioning 'secret easter meetings' lol.

If the meetings were secret, how can the journo know any facts LOL.


----------



## vida (24 March 2008)

Exactly what I thought about the reference to 'secret' meetings which simply means the journalist could not get anyone to disclose anything.  By calling it secret the journalist is justifying the lack of any new information in the article.



Trojax said:


> The lenders\banks are in the loop, it's the media whose been 'cut out', hence their mentioning 'secret easter meetings' lol.
> 
> If the meetings were secret, how can the journo know any facts LOL.


----------



## asx256 (24 March 2008)

i just don't understand why you guys are so concerned about this article! 99.5% of times these guys are wrong. IMO the best source is afr, and even they cant get things right.

your second best friend as we all know it, is ur chart. i have bought some shares recently (about 20K@ 0.30) and i think at the end of the day it will be worth it.


----------



## AnDy62 (25 March 2008)

Worth it by the end of the day eh? Bit of a ramp. Just kidding : Good luck to you, brave buy, time will tell...


----------



## metric (25 March 2008)

http://www.businessspectator.com.au...-to-pounce-as-predators-close-in-on-Cen-D2W4A

Pelorus Property Group is trying to take control of some trusts managed by Centro Properties Group. Centro is under severe financial stress but is resisting the attempt of the Australian-listed property manager to gain management control of some of its smaller unlisted trusts. Pelorus has questioned why Centro has suspended distributions if the trusts are not affected by the problems of the parent, and has raised concerns about an interest rate hedging contract


----------



## metric (25 March 2008)

also, in news , Six groups have expressed interest in the recapitalisation of the troubled Centro Properties Group. It is thought the Macquarie Group is the only Australian party to have submitted a proposal to adviser, Lazard Carnegie Wylie, by the deadline in mid-March 2008. As well, Centro wants to sell its half-interests in two wholesale property funds, Centro America Fund and Centro Australia Wholesale Fund

http://www.businessspectator.com.au/bs.nsf/Article/Six-parties-to-Centro-rescue-D2SJA


----------



## vida (25 March 2008)

My holding in CNP is 15000 at 0.5286 per share so I am well out of the money at the moment. 

I hope our trust is rewarded and CNP's recapitalisation and debt reduction is on track as the company says in latest reports. he media says otherwise and terribly so but they love to get attention and sell papers.

I am crossing my fingers, toes, hair and eyelashes it works out well and trying not to log into comsec and glimpse the downard SP today.  I definitely know I won't be buying any more of it but won't be selling soon either.

It is concerning though, reading the negative news reports which have an impact on the SP as they come through.  Its probably better not to read them




asx256 said:


> i just don't understand why you guys are so concerned about this article! 99.5% of times these guys are wrong. IMO the best source is afr, and even they cant get things right.
> 
> your second best friend as we all know it, is ur chart. i have bought some shares recently (about 20K@ 0.30) and i think at the end of the day it will be worth it.


----------



## vida (26 March 2008)

CNP are being sued for non disclosure. Is anyone nervous now?  

I am out of the loop of the litigation period as I sold and repurchased in March. 

THis is looking grim indeed although the credit squeeze is easing up and before the litigation gets off the ground it may all be sorted out.  

Hope CNP are on track as they claim to be.


----------



## metric (26 March 2008)

there will be some bargains to be had in the next few days.....if one believes centro can sort it out. it can IMO.

why be nervous. its only money


----------



## metric (26 March 2008)

does anyone have an insight into who are the major shareholders responsible for the litigation, and has it anything to do with Pelorus, or any other preditors looking to pounce on centro?


----------



## vida (26 March 2008)

The only major shareholders remaining are the Commonwealth Bank and they would not be suing as they are working with CNP to get it all sorted out. They are the major shareholder and creditor as well, is that right?  I reckon the litigants doing a class action become a major shareholder together but singly they are not. I would imagine CNP executives would be big shareholders but they may not be and they would not be suing. Anyone here going to join the litigants?  I believe Slater & Gordon are going to act for litigants suing MFS, maybe its time to buy S&G shares   Yeah I am keeping my CNP and just forgetting about it, whatever happens happens, its only money, a holiday in Greece as far as I am concerned. Melbourne is nice in September as well and staying in my own home saves a lot of money. I can just as well be a tourist here and re-discover my home town in comfort and no luggage and airports etc necessary.


----------



## vida (26 March 2008)

OOPS i was wrong, Commonwealth are not the only major shareholder.  Totally inaccurate incorrect and wrong.  

Why don't CNP make a press release with some good news!!?? I think they are waiting to be very sure and have dotted line signed etc before any significant announcement.  

At the moment all they have are expressions of interest the details of which should be disclosed to shareholders I would think but its their decision and its a case of need to know basis and I guess we don't need to know until things are final.

We would like to know more however so we don't lose sleep, not that I am.

My cousin had about $100K invested in CNP as of a year or two ago. They were very impressed with the dividend payments. I would think she and her husband will be completing the YES box on the class action.




vida said:


> The only major shareholders remaining are the Commonwealth Bank and they would not be suing as they are working with CNP to get it all sorted out. They are the major shareholder and creditor as well, is that right?  I reckon the litigants doing a class action become a major shareholder together but singly they are not. I would imagine CNP executives would be big shareholders but they may not be and they would not be suing. Anyone here going to join the litigants?  I believe Slater & Gordon are going to act for litigants suing MFS, maybe its time to buy S&G shares   Yeah I am keeping my CNP and just forgetting about it, whatever happens happens, its only money, a holiday in Greece as far as I am concerned. Melbourne is nice in September as well and staying in my own home saves a lot of money. I can just as well be a tourist here and re-discover my home town in comfort and no luggage and airports etc necessary.


----------



## nioka (26 March 2008)

asx256 said:


> i think with todays SP of 0.24-0.25 a lot of investors are happy with $2.50 PS!!
> 
> 2.50 is better then nothing imo. the only winners are people who bought below 2.50:




Don't get too carried away with that statement of value. That amounts to a total value of $2,075m if there are approx 8.3m shares. Short term debt is > $2.5 billion. If you want to go on that valuation as being an asset valuation there is not much left for shareholders. Maybe that valuation is by some one wanting to get a bargain buy.
I find it hard to value CNP because their organisation is so tied up with the management rights and shareholdings in so many "offshoot" organisations.
 Or are my figures wrong? I have made mistakes before.


----------



## moneymajix (26 March 2008)

> also apparently Big Mac has loaded lots of shares yesterday just in case, for a big day. win win situation for them IMO




Is it certain Mac was buying and/or selling yesterday?  
Is this a rumour or is there any evidence at this stage?


----------



## Trojax (26 March 2008)

asx256 said:


> from my understanding ............
> 
> I THINK xxxxxxxx is the bottom. good luck to all holders




Thats a pretty big call.. 69.7% of CNP is already tied up with Insto's

HSBC 16.3%
JP MORGAN CHASE 12.4%
NATIONAL 11.4%
CBA 10%
CITYCORP NOMINEES 7.6%
CITYCORP PTY 7%
VANGUARD 5% (of which 4% is JP Morgans anyway)

That's 69.7% held, once any other player or custodian hits 5% they'r required to notify the ASX as being a major holder within, 2 or 3 days max from memory.  HSBC, JPMORGAN OR CITYCORP could easily make a play if they wished to, but haven't at this stage.

If Mac is making a move on CNP I'd have thought we'd have seen an ann by now given the sheer volume churning since last week, not saying either way if occurring or not, but does seem just as likely as Blackstone or GE or any other party, ie all out there until something is confirmed somewhere, somehow, by someone LOL, it's all smoke n mirrors for now.

$xxxxx a share seems even as a guesstimate, extremely high given NAB online puts the NTA @ $1.31


----------



## Sean K (26 March 2008)

Gents, posts have been removed here because of unstabstatiated rumours claiming high premiums to the current sp, which only leads anyone with any reason to assume they are ramps. Please stick to some facts and figures, and/or provide an open source reference. Thanks, kennas


----------



## yang (26 March 2008)

whats the go with the big price bids & big volumes placed just now...

1	82,222	0.825
1	52,500	0.800

and then quickly retracted....


----------



## nioka (26 March 2008)

yang said:


> whats the go with the big price bids & big volumes placed just now...
> 
> 1	82,222	0.825
> 1	52,500	0.800
> ...



 Prices quoted in the "Auction" time, 4pm to 4.10pm don't mean people are offering those exact prices. They are positioning themselves in the "Queue". If you get a detailed quote during those periods you will get an "indicative" price. During this period there are often buy and sell orders placed to influence a price and withdrawn before the auction is completed at 4.10pm. The same applies at 9.50am to 10 am. I assume this is what you saw.


----------



## yang (26 March 2008)

nioka said:


> Prices quoted in the "Auction" time, 4pm to 4.10pm don't mean people are offering those exact prices. They are positioning themselves in the "Queue". If you get a detailed quote during those periods you will get an "indicative" price. During this period there are often buy and sell orders placed to influence a price and withdrawn before the auction is completed at 4.10pm. The same applies at 9.50am to 10 am. I assume this is what you saw.




its nice to learn  

thanks for that nioka...  so the large bid wouldve been put in to knock the price up? (as it would seem as though it pulled it down slightly).

yang


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## Trojax (27 March 2008)

yang said:


> its nice to learn
> 
> thanks for that nioka...  so the large bid wouldve been put in to knock the price up? (as it would seem as though it pulled it down slightly).
> 
> yang




Yeah thanks from me too, I had no idea on that, is it common for that to happen? So sus though, even on close peeps can still be playing games!

I really wish CNP would clear the air now regarding the finalised offers, we pretty much know the players on the stakes up for sale, there were media reports equity injectors were adverse to CAF\CAWF selling, of course they would be, but the juggling thats going on really needs some public announcement sooner than later, it's getting to be hard to be positive in the face of the media grind these days, very draining.


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## ghostworld (27 March 2008)

yang said:


> its nice to learn
> 
> thanks for that nioka...  so the large bid wouldve been put in to knock the price up? (as it would seem as though it pulled it down slightly).
> 
> yang




Not really knocking price up. Lets say there's 30,000 shares on offer for sale @ .30c. At 4.00pm there are 3 buyers all wanting to buy this 30,000 shares. The reason they bid for .80c or some other higher amount is so that they will be first in line to get that first 30c on offer. The system actually works out all of the buyers bids and sellers offers at this time and lets you know an 'indicative bid'. This will be the price that person that offered to buy at 80c will actually end up paying.


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## metric (27 March 2008)

ann from centro...

http://www.asx.com.au/asx/research/...panyName=&principalActivity=&industryGroup=NO


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## vida (27 March 2008)

That's really an announcement from PPI and not coming from CNP. That PPI mob are aggressive and as nasty and conniving as any politician at election time. Where will it all end!!?? Oops "end" is a bad omen word to use, we want to know when will all the nonsense stop so the company and the SP can get back to business. 

I note in the AFR there is an article that Slater & Gordon the law firm also being approached to run shareholder litigation against CNP, well that firm advises caution on rushing into legal proceedings. It very wisely says that premature litigation could destroy any hope CNP has of restructuring and negotiating the refinancing and recapitalisation it is in the process of doing which is a very delicate process.  

SLater & Gordon say and I agree with them totally, that any legal threat to CNP at this stage could derail them and reduce any shareholder value there may have been.  So we hope that the litigation lovers read, listen and think before they act. Patience is a virtue and its no use closing the barn door when the horse has bolted.  

There is plenty of time for litigation later in the year when things have settled down and there is more certainty in the outcome of the current CNP strategies towards survival.



metric said:


> ann from centro...
> 
> http://www.asx.com.au/asx/research/...panyName=&principalActivity=&industryGroup=NO


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## wilko66 (27 March 2008)

vida said:


> That's really an announcement from PPI ....




Hi Vida, I'm a CNP holder that bought in after the big fall & like many I'm still in a hole but consoled that at least I didn't buy in November.  

I just wanted to say how much I'm enjoying your posts along with those of Trojax.  It's great to hear balanced and rational reviews and opinions, please keep it up.  

I hold a similar view to some expressed here (and it is based on my own personal plan and opinions)...if they survive there'll be upside...anything & any SP movement between now and the tabling of  reliable news (ie from Centro Mgmt) to that effect or otherwise is moot considering my own plan.

In MY PERSONAL OPINION even in the worst case scenario NTA is still way better than 25c p/share so we're in a zone of "even if it get's worse I can't see how it can get worse...so why sell"  

It is fact that several analysts have target prices b/w 60c & 75c but these factor in the unusual risk, possible firesale conditions and complexity of analysing the structure.  Inherent in these analyses are NTA estimates that are higher.  I am still optimistic despite the occasional lump in my throat.

Right now this forum is for me, as much a support group as a source of info  

Please keep posting.


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## cnpwellwisher (27 March 2008)

Hey guys, from my username u can say that I have got good amount of CNP shares. I initially bought some at 0.53 in feb and some more at 0.25 just before 3-4 days. 
Have u guys any guess what's the price per share the bidders are ready to pay i.e. macaquarie, blackstone, GE real estate in cause of a complete takeover ????
Do u guys think that we would be able to make a good amount of profit selling our shares to this bidders .....
Secondly is the price or bidding process going to be affected if Slater and Gordon file a lawsuit against the centro ????
If the bidders are successful in taking over the company is the price of CER going to increase (I got shares of CER too ) ????


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## metric (27 March 2008)

cnpwellwisher said:


> * Have u guys any guess what's the price per share the bidders are ready to pay i.e. macaquarie, blackstone, GE real estate in cause of a complete takeover ????
> 
> *Do u guys think that we would be able to make a good amount of profit selling our shares to this bidders .....
> 
> ...





g'day cnpwellwisher. i guess it depends on the ammount of shares owed over a potential price offer. if the majority of shares were purchased by people over $5.00, then they wont be happy with $1.50. where as, i would as i bought in at 31c.
CNP is chin deep in the muck. last thing we need is shareholders creating legal 'waves'. 
i feel confident in a management behaves unemotionally during stress. CNP is well led.


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## sonicwind (27 March 2008)

Vanguard became and ceased to become a substantial holder within the same week.

Looks like they gambled on some big positive news coming out last week, which didn't...


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## vida (27 March 2008)

From what I can see Vanguard only sold 10% of their holding yesterday which brought them under the required amount of shareholding so they ceased to be a substantial shareholder. They still hold massive quantity of shares from figures I saw on checking. Maybe they will sell off gradually each day as they cannot offload all in one day. We wait and see and who cares!!!

This is a huge risk and I trust no one takes my posts as encouraging them to stay investing in CNP as I am not sure of anything at all. I am just trying to figure it all out but my resources are as limited as anyone else's. Its a risk is all I can say but if it works out we will be happy and if not hopefully we will be happy anyway. 




sonicwind said:


> Vanguard became and ceased to become a substantial holder within the same week.
> 
> Looks like they gambled on some big positive news coming out last week, which didn't...


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## Trojax (28 March 2008)

sonicwind said:


> Vanguard became and ceased to become a substantial holder within the same week.
> 
> Looks like they gambled on some big positive news coming out last week, which didn't...




Vanguard as they said when went over 5%, are an index based fund..they will drop in and out around this level on overall indices movements. When they came onto CNP they also came onto Valad and GPT, and as they drop their index holdings they drop back out of CNP and if check ASX announcements they also dropped just out of Valad and GPT as well today, it really doesn't mean SFA at all, they're just following the indices as per their business model on a whole.

I think they sold off 400,000 shares, out of what nearly 50 million shares traded traded today, hardly newsworthy or indicating anything.


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## Trojax (28 March 2008)

cnpwellwisher said:


> Hey guys, from my username u can say that I have got good amount of CNP shares. I initially bought some at 0.53 in feb and some more at 0.25 just before 3-4 days.
> 1) Have u guys any guess what's the price per share the bidders are ready to pay i.e. macaquarie, blackstone, GE real estate in cause of a complete takeover ????
> 2) Do u guys think that we would be able to make a good amount of profit selling our shares to this bidders .....
> 3) Secondly is the price or bidding process going to be affected if Slater and Gordon file a lawsuit against the centro ????
> 4) If the bidders are successful in taking over the company is the price of CER going to increase (I got shares of CER too ) ????




Will add point form to make easier:

1) No one does, no one even knows what bids are locked down and\or at what value or what component. Ie CAF\CAWF, whole company etc. We know nothing concrete so a concrete estimation is impossible. NTA is $1.31 according to Nabs latest data, though doesn't mean much if the refin doesn't happen.
2) I'd wait for the bidders, either way, I doubt we'll have the luxury of choosing
3) Its not Slater and Gordon, it's Maurice Blackman. IMO it's the stupidest timing with the most ill informed basis. If CNP go down, it'll be years before they even see anything and after IMF fees etc, it could be a fraction of any any benefit if they'd held out for a refin and recovery. Though effectively it does make it harder to motivate any potential takeover predator I doubt it would be a mitigating factor on it, the debt refin is the issue at hand.
4) Hypothetically, based on your assumption that there is a takeover of CNP, CER is 50% owned by CNP, so in effect a new owner of Centro would be the new 50% stakeholder. I'd say that would be positive as would remove the sentiment attached to CNP's current issues.

The overall fundementals haven't changed, just the timeline. The shorter we get to April 30 the more volatile things are becoming. I can only refer to is Rufrano stating there are bids (as to on what or how many we don't know), the frustrating part is will there be an announcement and are they in or out of the money.. He had a tele-conference with the bankers over easter to update them, I'd imagine that would have also covered offers received, overall or in components. We haven't had an announcement on this to date and no indication there will be yet, volume has been quite high this week. Overall nothing IMO has really changed, we're still waiting and hoping for positive news.

In the absence of facts I'm in a hold pattern, but am prepared to see it out (mentally and financially) in the belief the big lenders will extend again if there's no equity injection or sale, though really this is just my opinion, I can afford to lose (I have more than Vida here so a fair bit) but really if your sitting on CNP as a bet you need to win on rather than a speculative play in an overall portfolio then you've really got to consider what your risk ratio is overall and what it means to you as an individual.


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## Trojax (28 March 2008)

LOL about to head to bed, check the news and find my last paragraph above is pretty much substantiated.

"Bankers agree to extend Centro's debt deadline to avoid fire sale of assets"

*   Carolyn Cummins, Sydney
* March 28, 2008

CENTRO Properties Group financiers have thrown the group's directors a six-month lifeline to repay $4.2 billion.

The decision to extend the Australian banks' deadline from April 30 to September 30, to coincide with the repayment deadline for the US bankers and bondholders, was made at meeting of all financiers last week in San Francisco.

Full article: 

http://business.theage.com.au/banke...-avoid-fire-sale-of-assets/20080327-21y2.html

This is EXCELLENT news, hopefully there will be an official announcement on this tomorrow.

Worthy also of noting (again to be confirmed outside media article)

"Centro's bankers are also said to be happy to keep Centro as the manager of its $2 billion syndicate business, which is under attack from the Pelorus Property Group.

A meeting of Centro's MCS16 syndicate security holders was scheduled for Monday, but that has been postponed"


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## vida (28 March 2008)

Trojax, that is brilliant news!!! I just found out myself on another forum and am very pleased as you can imagine.   

I was stressing a bit lately over whether I should sell out or buy heaps more, swinging between two extremes. Either way could be a huge mistake or the best thing to do. So I just decided to keep holding what I have and not risk more money on it but also not risk being out of it when things begin to glow again for CNP. 

Its looking good now, very shiny and glowy and having another six months is just what the Glenn (Rufrano) needed to do things properly and save the company. If so many influential and resourceful people want it to succeed then it will.

Its obvious no one seriously financially connected to it can afford for it to go under especially not the banks.  Also the world credit crunch might be eased in coming months and that would make all the difference, it cannot go on forever - there is always light at the end of tunnel at some stage.

Congratulations to the patient holders and no thanks to the negative apocalyptic depressing media reports, but they were great in depressing the SP and giving us opportunity to buy bargain basement

Whew that is handsome news indeed.


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## metric (28 March 2008)

that ann has been refuted. no such deal is done apparently...

http://www.businessspectator.com.au...-working-on-debt-extension-D68T4?OpenDocument

Troubled Centro Properties Group has denied a report that its lenders have agreed to extend a refinancing deadline to help the firm avoid a fire sale of assets. 

Earlier, The Age reported that a decision to extend the Australian banks' deadline from April 30 to September 30 was made at a meeting of all financiers last week in San Francisco. 

Centro told Reuters no such agreement has been reached, although the banks were working on an extension.


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## MangaNOID (28 March 2008)

Numbers of buyers now out way the sellers almost two to one! including the volume. Haven't seen that for a while. Cant see an announcement about the extension yet though.


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## lingqi (28 March 2008)

The news just makes me feel confused. Theage says both Australian and US banks agreed to extend Centro's debt to September 30. However, Bloomberg says "U.S. banks agreed to an extension on the remaining A$2.6 billion of debt, on condition the Australian creditors do the same." Centro even stated no such agreement has been made. What is going on?


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## sting (28 March 2008)

Sounds like a bit of scare mongering/price fixing via the media to me.

There are a few companies out their who would love to see centro go under, it seems the legal above board methods are failing so are they resorting to propaganda methods to confuse the smaller holders to bail out.

Those who have studied sun tzu will know what I mean.


SEMPER UBI SUB UBI


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## oldblue (28 March 2008)

According to the SMH, not all the Australian lenders have yet agreed to the conditions but discussions are continuing. The general tone of the article is pretty positive.

I don't think sun tzu is involved.


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## sting (28 March 2008)

oldblue said:


> According to the SMH, not all the Australian lenders have yet agreed to the conditions but discussions are continuing. The general tone of the article is pretty positive.
> 
> I don't think sun tzu is involved.




Well I hope he isnt involved personally either....: but surely you must agree his principals and teachings go hand in hand with share trading


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## Bushman (28 March 2008)

If you invest in CNP/CER, why not hedge that bet with an investment in IMF. As they say in their recent investor, they are counter cyclical in a bear market! Case book is likely to be bulging with CNP, CER, AFG, MFS and the like. Sure there will be some class action related to VRE as well. 

Anyway maybe this belongs in an IMF thread.


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## ghostworld (29 March 2008)

Not suprised that Pelorus pulled another stunt. Not having enough votes to win, they've decided to delay the meeting. They've been very deceitful from the beginning trying to use scare tactics against naive investors. That might work with some retail investors but it looks like the institutions are still cool headed even in this bearish environment. Pelorus latest announcement takes the cake. See if anyone can make sense for the reasons as to why they pulled out of the meeting. (All I read is blah blah blah, due dilligence blah blah, scare tactic blah blah I hope your stupid enough to buy into this crap blah blah). 

On another note, I find it amusing that the author below (Carolyn Cummins) has so quickly changed her negative tune. For example:

"PELORUS Property Group's raid on Centro Properties' $2 billion syndicate business* hit a further hurdle yesterday* when, at the 11th hour, it postponed until May 20 three meetings scheduled for coming weeks."

As far as I can remember there was no mention of previous hurdles. All the previous articles seems to indicate that Pelorus had a high chance of winning and that Centro was not doing enough. How do you defend against a misleading info campaign that treats shareholders as idiots? 

Moving ahead, I hope that the CEO succceds in his plan to recap the company so that Centro maintain management control of the properties. 



http://business.smh.com.au/centro-buys-time-for-carveup/20080328-2271.html


Centro buys time for carve-up

    * Carolyn Cummins
    * March 29, 2008

PELORUS Property Group's raid on Centro Properties' $2 billion syndicate business hit a further hurdle yesterday when, at the 11th hour, it postponed until May 20 three meetings scheduled for coming weeks.

Key investors said the deferment suggested Pelorus did not have the numbers to succeed in its quest to manage Centro's MCS 16, 11 and 19 NZ/I syndicates.

Pelorus needs 75 per cent of the vote to take over management of the syndicates. Its directors have argued that Centro should not be allowed to vote because it is not a direct investor in the syndicates. Centro has disputed the point.

The first meeting, for syndicate MCS 16, was set down for Monday at Pelorus's serviced office in Neutral Bay. It was to be followed by MCS 19 NZ/I on Wednesday and MCS 11 on April 10.

The delay came as Centro confirmed its Australian bankers were in "deep discussions" about extending the deadline to repay the first, $2.3 billion tranche of debt, from April 30 to September 30. It is understood an agreement was reached for the entire $4.2 billion to be repaid on the later date.

Centro said the April 30 cut-off did not give it time to conduct an orderly sale of the business. The group has another six months to find a buyer for all the business or to sell individual assets. The company's chief executive, Glenn Rufrano, planned to rescue the group by raising cash through a combination of selling its interest in the Australian and US wholesale fund and/or an equity injection. He planned to retain control of the funds management, syndicate business and centres.

Pelorus's chief executive, Stuart Brown, explained in a statement yesterday that it had deferred the syndicate meetings for six weeks because of uncertainty surrounding Centro's finance. In the notice to unit-holders, Pelorus also said it would be the direct manager of the syndicates but proposed to appoint Trust Company as the overall responsible entity, to avoid the same conflicts of interest and lack of transparency that it claims took place under Centro's tenure.

A spokesman for Centro hit back, saying: "Based on the proxies that Centro MCS believes have been lodged, Pelorus was staring at defeat at all three scheduled meetings."

The manager of Centro MCS Syndicates, Gerard Condon, added: "It is disappointing that Pelorus has cancelled the meetings of investors on incredibly short notice and without any credible reason, particularly given the confusing, misleading and aggressive campaign they have waged against Centro MCS."

Centro closed up 4c to 28.5c.


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## Lucky_Country (29 March 2008)

Yep feeling very confident on CNP refinancing. Pelorus pulling out is just another confidence booster that no one is panicing and want them to succeed.
Next week should be very interesting indeed.


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## metric (29 March 2008)

two simple facts that gives me faith in CNP, is the total lack of emotion and lack of 'reaction' management have shown during this crisis. a very steady CEO, confident in the numbers is my guess.


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## vida (29 March 2008)

IMF may have a case book of names but that doesn't mean much. They financially aided litigation against AWB which I read in news lately has been dismissed.  I wonder what happens when the case against a company funded by IMF loses. Who pays the legal costs etc ?

In the case of CNP, IMF have pledged financial support but its conditional that the lawyers can make a commercially viable case so they can win & get  costs awarded. IMF would be repaid at a high premium. But they can lose and I wonder what the various conditions are for their funding of litigation against companies. If they win their case I bet they take a lot of the settlement and what is left for the shareholders after IMF financiaing and the legal costs are paid?  very little I would assume.

I wouldn't invest in companies like IMF myself - they are simply gambling with their investors' money in the courts, they win some lose some and I wouldn't want my money tied up dependant on these kinds of outcomes.  Their type of business is distasteful to me as well as seasonal & unreliable.

Just my opinion.  

I would prefer to invest in Slater & Gordon who are a pretty good law firm and whose SP is down. They are approaching this litigation issue with a clear commercial head and not encouraging to destroy value in CNP by suing & are advising shareholders carefully looking at all possibilities.  



Bushman said:


> If you invest in CNP/CER, why not hedge that bet with an investment in IMF. As they say in their recent investor, they are counter cyclical in a bear market! Case book is likely to be bulging with CNP, CER, AFG, MFS and the like. Sure there will be some class action related to VRE as well.
> 
> Anyway maybe this belongs in an IMF thread.


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## JTLP (30 March 2008)

In today's HS there was a Sell Recommendation from some guy @ Intersuisse for CNP.

Basically said get out with whatever capital you can...

JTLP


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## vida (30 March 2008)

JTLP: all the analysts rate CNP as a sell now as risk is very high, nothing new there, we have known that for awhile. Those staying in know the risks being taken I would think and are doing so to not miss the rewards when and if CNP recovers from its debt situation. There is a good possibility that CNP will survive and recover as its assets are valuable and profitable and can pay the interest on the debts. Its only the 'due now' debt that is having difficulty being refinanced, but its not impossible to fix.  There is no certainty of course and its all a bit of a gamble and that is ok if we can afford the risk. 

The shareholders who bought at very high SPs for the high yields are the most seriously affected and angered.  The SP when and if it recovers significantly will not rise enough to put them back in the money for a long long time I would think. The analysts and advisers get it wrong many times and they only go by current information and try to give the most appropriate capital preserving advice I would think, which is their job.  They only do their best and they certainly got it wrong last year when CNP was rated a buy!!!!!



JTLP said:


> In today's HS there was a Sell Recommendation from some guy @ Intersuisse for CNP.
> 
> Basically said get out with whatever capital you can...
> 
> JTLP


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## JTLP (30 March 2008)

vida said:


> JTLP: all the analysts rate CNP as a sell now as risk is very high, nothing new there, we have known that for awhile. Those staying in know the risks being taken I would think and are doing so to not miss the rewards when and if CNP recovers from its debt situation. There is a good possibility that CNP will survive and recover as its assets are valuable and profitable and can pay the interest on the debts. Its only the 'due now' debt that is having difficulty being refinanced, but its not impossible to fix.  There is no certainty of course and its all a bit of a gamble and that is ok if we can afford the risk.
> 
> The shareholders who bought at very high SPs for the high yields are the most seriously affected and angered.  The SP when and if it recovers significantly will not rise enough to put them back in the money for a long long time I would think. The analysts and advisers get it wrong many times and they only go by current information and try to give the most appropriate capital preserving advice I would think, which is their job.  They only do their best and they certainly got it wrong last year when CNP was rated a buy!!!!!




Vida,

I appreciate what you are saying and how you are putting the situation into prospective; I was merely posting some info I read that I deemed fit. These last few pages have been littered with Centro's survival, which may arise to false hope for noobs and such, which is why I thought it to be appropriate to list what I read. 

Just adding another dimension/perspective into the argument


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## metric (30 March 2008)

JTLP said:


> Vida,
> 
> I appreciate what you are saying and how you are putting the situation into prospective; I was merely posting some info I read that I deemed fit. These last few pages have been littered with Centro's survival, which may arise to false hope for noobs and such, which is why I thought it to be appropriate to list what I read.
> 
> Just adding another dimension/perspective into the argument




most here are careful not to ramp. but its ok to be positive, and obviously many here are of the opinion that centro has more than just 'false hope' going for it.


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## propergeez (31 March 2008)

Both CNP and CER are on trading halts pending announcements - looks like the banks have signed on the dotted line for the extension. (Well I hope!)


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## metric (31 March 2008)

centro ann.


Dear Sir
US$450 million Guarantee Released
As previously advised to the market on 15 February 2008, Centro Retail Trust (CER) identified a
guarantee for US$450 million provided by a CER controlled entity to holders of the Centro
Properties Group’s US Private Placement Notes. 

to continue go to link..


http://aspect.comsec.com.au/asxdata/20080331/pdf/00827410.pdf


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## vida (31 March 2008)

Hello Metric

I never feel the need to ramp but need to explain to myself mostly the reasons why I am holding my investment in CNP as a recent shareholder.  I think its worth a risk but I am very aware of the uncertainty and overall negative financial climate we are in.  My CNP holding is not a major part of my portfolio but if it does well it is likely to become that. If not then at least I had a go and I don't intend to have any regrets.

Vida  




metric said:


> most here are careful not to ramp. but its ok to be positive, and obviously many here are of the opinion that centro has more than just 'false hope' going for it.


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## moneymajix (31 March 2008)

www.bloomberg.com

*Centro Properties, Retail Shares Soar on Release of Guarantee*
By Laura Cochrane

March 31 (Bloomberg) -- Centro Properties Group, the Australian property trust seeking to refinance A$4.9 billion ($4.5 billion) of debt, had its biggest three-day gain since January in Sydney trading after a unit was released from a $450 million bond guarantee.

Centro Retail Group no longer has to guarantee bonds sold by Centro Properties after the companies met a deadline today to provide "necessary documentation'' to the U.S. holders of the notes, the two Melbourne-based trusts said today in a statement to the Australian Stock Exchange.

Centro Properties gained 2 cents, or 9 percent, to 31 Australian cents as of 11:29 a.m., extending its surge to 30 percent in the past three trading days on the Australian Stock Exchange. Centro Retail soared 9.7 percent to 34 Australian cents.

Centro Properties Group, the owner of about 700 U.S. shopping malls, on March 28 said it had started talks with Australian creditors to extend its April 30 debt deadline. Centro, which has lost 95 percent of its market value since December, is seeking its second debt extension as it searches for buyers for its assets.

To contact the reporter on this story: Laura Cochrane in Melbourne at lcochrane3bloomberg.net.


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## vida (31 March 2008)

Centro seem to be on track with their strategies but the SP is still very weak  although not worsening in past few days its barely limping along. Its a bad time for all stocks anyway and nothing but gloomy news in the AFR today.


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## Trojax (31 March 2008)

Good but strange ann re the 450 million US noteholders giving up the guarrantee, hmm, 'agree to release the guarrantee upon the delivery of certain documentation by Centro properties group on or before 31st March'

Centro advises blah blah given in timely manner, guarrantee released, too easy, yeah toooo easy lol.

Now apart from being good news, yay, 450 million now not held against CER... what I want to know is what did CNP have up their sleeve here, no one gives away a 450 million guarrantee for nothing unless its replaced by something equally tasty or better. 

A business model or strategic update in my mind just wouldn't cut it, there's got to be some upside for the US holders, maybe there will be an ann re the locals officially matching 30 Sept shortly, it's the only thing we know of that could be matching a deadline like this which is the week after the bankers meeting. Still don't get why they'd give the guarrantee up though lol, only way I'd do that would be if knew was getting my rubles back for sure haha.


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## oldblue (1 April 2008)

Yes, Trojax, its a bit of a puzzle.
I wonder if the note holders get a specific charge over certain properties in exchange for giving up the guarantee. This assumes that there are unencumbered properties to give a charge over that other financiers don't already claim or that someone is prepared to give up an existing charge. The more I think about it, the muddier it seems!


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## Trojax (1 April 2008)

oldblue said:


> I wonder if the note holders get a specific charge over certain properties in exchange for giving up the guarantee.




Hey oldblue, no I don't think it's property.. it specifically states 'certain documentation', it's paperwork of some kind but not property or another guarrantee, that's why I was thinking could be some official notification the Aust lenders are matching the US for the Sept 30, it's the only thing of value on paper I can think of as I don't see a restructure plan alone being worth much.

I was also thinking maybe it's a guarrantee from a refinancier for future payment while clearing titles for clarity of equity but that'd be too much to hope for LOL. :

Maybe seeing more into it than need be, Maybe Rufrano just was very savvy on the US renegotiation and they needed some short term props to not call in the debt. 

All I do know is it's not helped the SP much for now, need something tangible to put a dent in the day trading.


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## Trader52 (1 April 2008)

I think there would have been a bit of dumping of shares by ANZ from the Opes Prime collapse yesterday and today they may have softened the SP even with the positive announcement.  Only a thought.


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## vida (2 April 2008)

I think the announcement was positive but not outstandingly so thus did not make significant impact on the SP in current circumstances. From the late night business programs on TV tonight I got the feeling things are looking better overall. FKP has refinanced and back on track and the commentator said that some companies are managing to survive the credit crunch which should encourage investors. He did not say anything about CNP at this stage.



Trader52 said:


> I think there would have been a bit of dumping of shares by ANZ from the Opes Prime collapse yesterday and today they may have softened the SP even with the positive announcement.  Only a thought.


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## oldblue (2 April 2008)

Its been reported - SMH - that the "documentation", whatever it is, has been delivered and that the guarantee has been released.
No doubt details will emerge in due course.


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## ghostworld (2 April 2008)

oldblue said:


> Its been reported - SMH - that the "documentation", whatever it is, has been delivered and that the guarantee has been released.
> No doubt details will emerge in due course.




I must be reading the announcement differently to you guys. MY understanding of it was that documentation has been provided so that the US note holders has released the guarantee for CER only. CNP still has to guarantee the debt but CER no longer has to. 

I could be reading this wrong.


----------



## oldblue (3 April 2008)

Yes, the G/- was from CER and has been discharged because " certain documentation" has been provided for the benefit of the note-holders.
Just what this documentation is hasn't been disclosed yet. I'm inclined to think that it's not a straight replacement G/- from CNP - if it was this straightforward surely that would have been said. So my hunch/hope is, as Trojax has posted, that this is part of a bigger funding package, the details of which aren't yet finalised.


----------



## metric (3 April 2008)

the plot thickens...

http://www.businessspectator.com.au...nk-as-interest-falls-short-DBSYM?OpenDocument

Financially troubled Centro Properties Group has received six bids, but all are well short of its December 2007 share price of $A5.70. The prospective buyers are unwilling to pay more than $A0.90 per share. This is well above Centro's current share price of $A0.29, but seemingly not enough to put the company out of risk of administration. 

for more go to link.


----------



## wilko66 (3 April 2008)

metric said:


> the plot thickens...
> 
> http://www.businessspectator.com.au...nk-as-interest-falls-short-DBSYM?OpenDocument




Anyone have a view whether this article is the reason for this morning's surge?  I understand their "more than between the lines" inference but in stating a bid of 0.90 I wonder if that accounts for the incredible buy/sell ratio and the SP uplift.


----------



## propergeez (3 April 2008)

Does Anyone have the original Australian Financial Review news statement? The business spectator says its their source, and wondering whether there is any differences - ie business spectator hyping:

Centro on brink as interest falls short

Source - The Australian Financial Review

TOP NEWS
US recession possible: Bernanke 4:58 AM
Opes Prime carnage grows 11:02 AM
Local market opens higher 10:51 AM
Leighton wins $1bn contracts 10:41 AM
Asciano sells Brambles stake 10:20 AM

THE SPECTATORS
SCOREBOARD: Financials bottom
Kohler: Forecast adjusted
Three-way split
Gottliebsen: Signs of life
Disclosure disaster


Financially troubled Centro Properties Group has received six bids, but all are well short of its December 2007 share price of $A5.70. The prospective buyers are unwilling to pay more than $A0.90 per share. This is well above Centro's current share price of $A0.29, but seemingly not enough to put the company out of risk of administration. Centro's lenders would prefer that the assets of the Centro Australia Wholesale fund be offered separately, as they hopefully await a more acceptable offer from a single large investor

Distributed by News Bites.  © Lexis-Nexis


----------



## Quixis (3 April 2008)

http://www.afr.com/home/viewer.aspx...lls+short&source=/_xmlfeeds/property/feed.xml

What's do you think the comments about the head stock are? Valid?


----------



## metric (3 April 2008)

wilko66 said:


> Anyone have a view whether this article is the reason for this morning's surge?  I understand their "more than between the lines" inference but in stating a bid of 0.90 I wonder if that accounts for the incredible buy/sell ratio and the SP uplift.




its got to be the article. cnp is up 32% @ 11.15 qld time. no other reason i can see, except this article.


----------



## Trojax (3 April 2008)

12:38pm 030408

967 buyers for 31,132,737 shares  	
158 sellers with 5,812,929 shares

*does a happy jig* lol


----------



## jaeyon (3 April 2008)

Trojax said:


> 12:38pm 030408
> 
> 967 buyers for 31,132,737 shares
> 158 sellers with 5,812,929 shares
> ...




CNP up 55%. amazing.

who here thinks it'll come close to the .9 offered by the larger investors by close of business today?


----------



## Trojax (3 April 2008)

jaeyon said:


> CNP up 55%. amazing.
> 
> who here thinks it'll come close to the .9 offered by the larger investors by close of business today?




*sticks hand up* LOL

That's not a buy tip btw, I hold a shatload already from averaging down, this is like getting some nookie on christmas morn, just doesn't get any better.

Vida, where you at? Gotta be grinning at this 

Just cracked .60 LOL giddy up! EDIT and down again and up again, LOL this is insane volumes haha! Fun to watch!


----------



## jaeyon (3 April 2008)

Trojax said:


> *sticks hand up* LOL
> 
> That's not a buy tip btw, I hold a shatload already from averaging down, this is like getting some nookie on christmas morn, just doesn't get any better.
> 
> ...




hmm rose pretty dam fast but just saw it drop down to .505 is this normal in a stock with a large volume being traded?


----------



## Fed23 (3 April 2008)

What a run in a short amount of time. I was clicking for updates and every time it was 1cent higher, saw it hit 62cents and then come back down to 50.5.


----------



## jaeyon (3 April 2008)

hmm share price movement has slowed down dramatically, hovering around .505 mark

any thoughts? looks to me like its on a trading halt at the moment?


----------



## hsv2001 (3 April 2008)

ooo pre_nr anyone getting more excited??? that was a massive drop after hitting 117 percent gain overall, than back down to 79 percent


----------



## Birdster (3 April 2008)

jaeyon said:


> hmm share price movement has slowed down dramatically, hovering around .505 mark
> 
> any thoughts? looks to me like its on a trading halt at the moment?




I think your'e right. Status for me has gone pre-open. What a buzz watching the price move though. 

Must be an ann coming...


----------



## metric (3 April 2008)

yeh, i was watching too. it shot up to 65 and then plunged to 50.5. dont know what thats all about. then i noticed the trading halt. where does one go to to find out why a trading halt was called? i looked on the asx, also the centro web site. no ann.

i was a jiggin too! why do they call halts on the way UP? but not on the way DOWN!!???


----------



## jaeyon (3 April 2008)

metric said:


> yeh, i was watching too. it shot up to 65 and then plunged to 50.5. dont know what thats all about. then i noticed the trading halt. where does one go to to find out why a trading halt was called? i looked on the asx, also the centro web site. no ann.
> 
> i was a jiggin too! why do they call halts on the way UP? but not on the way DOWN!!???




not good for the heart is it? what a wild ride. speculations on what the reason for the halt might be?

is cnp hot or not?


----------



## hsv2001 (3 April 2008)

The announcement is pending atm, it will be on etrade or asx any second now, I imagine there will be a trading halt called tho pending a takeover or an acceptance to one of their 6 offers received today.

We can only wait from here........

ps tru, I wish they called the halt at 65 cents, then I'd be more excited lol


----------



## vida (3 April 2008)

That was amazing but unfortuantely/fortunately I didn't sell. I am not sure which is the right attitude at this point.  Why did the news that CNP is near brink of administration send the SP up so fast? Although the journalist's conclusion is as usual overstated and nothing short of sensationalist hysteria.  I don't understand at all what it all means to us.  If they have offers of .90 cents per share, how does that translate to us getting that much per share?  I dont' think CNP are going to accept that offer and things will be back to where they were yesterday and we will all wish we had sold today.  What does everyone think? Are we in trading halt now, it is so weird.


----------



## vida (3 April 2008)

I imagine if there is a trading halt its because the ASX has requested information from CNP as to explanation for the sudden massive rise on the SP.  It will be back on shortly am certain and will dive : hopefully not.


----------



## Birdster (3 April 2008)

jaeyon said:


> not good for the heart is it? what a wild ride. speculations on what the reason for the halt might be?
> 
> is cnp hot or not?




Maybe to check the validity of the .90 cents offer. Imagine setting a rumor in place that a company was going to offer $2.50 a share to buy out Centro. The price would soar towards the offer. 

Only speculation though.


----------



## jaeyon (3 April 2008)

from the asx website
"A company may request a trading halt in its own securities, e.g. if the company is negotiating a takeover.

If ASX agrees to the trading halt, trading ceases until either ASX lifts the trading halt, or the start of normal trading on the second trading day after the trading halt is imposed, i.e. up to 48 hours later."

normal trading halts are usually for 10 minutes, so if this lasts longer then 10 minutes....takeover anyone?


----------



## hsv2001 (3 April 2008)

I'm not too sure on this one, if you look at the market depth there is plenty of people willing to sell under 50.5cents ps and nowhere near as many wanting to buy over 50.5c, not sure how this will effect but i'm a little worried now.

approx 200000 wanting to buy up to 68c
approx 1000000 + wanting to sell down to 32c

hrmmm hurry up ann


----------



## metric (3 April 2008)

to sell or not to sell?? well, i bought in @31c so im ahead at present. also, this has another 4 weeks to play out. to sell and buy back in is a risk. to hold is a risk. i think ill just hold and see how it plays out. lots of people have an upward interest in this now, as many new holders bought in today over the OP.


----------



## stargazer (3 April 2008)

Hi all

Yes very fast moving stock today.  Halt came all of a sudden after it tumbled.  Just lengthened from what i wanted to ask just so i could post.

What does PRE_ NR mean?

Cheers
SG


----------



## jaeyon (3 April 2008)

last traded at 11:54 according to comsec. current time is 1:15pm.

looks to me like this trading halt is being extended (possibly to negotiate takeover)

also interesting to note (though a bit nerve racking), market depth has increased on the sell side from about 8mill before the halt to roughly 11mill after the halt, with the buy side floating around 24 mill.


----------



## hsv2001 (3 April 2008)

hey, PRE_NR means the stock is in pre open stage pending a notice received.

I hope this ann is good, i'm over losing on centro lol

cheers marc


----------



## hsv2001 (3 April 2008)

jaeyon said:


> last traded at 11:54 according to comsec. current time is 1:15pm.
> 
> looks to me like this trading halt is being extended (possibly to negotiate takeover)
> 
> also interesting to note (though a bit nerve racking), market depth has increased on the sell side from about 8mill before the halt to roughly 11mill after the halt, with the buy side floating around 24 mill.




Hi, i've notice the time differences myself on all the share trading on etrade, I'm sure that their systems have had trouble with the adjustment on daylight savings etc. because the current time on their systems is correct, it's just the trading times are non daylight savings for some reason.


----------



## stargazer (3 April 2008)

Thanks for the reply that was as quick as the share price going up on this stock today..lol

Cheers
SG


----------



## hsv2001 (3 April 2008)

CENTRO IS NOW IN TRADING HALT!!!! 


just thought i would announce that, this could be a really good thing for all us still holding our cnp shares.

looks like a few days to wait now...


----------



## wilko66 (3 April 2008)

Well it's been over 20 minutes now.  

ASX query to CNP who request time to respond is my understanding

The thing I find intriguing (nerve wracking) is the sharp drop that immediately preceded the halt after such a steady climb.   The volumes were solid but not out of synch with the day around the peak price but to drop 22% in 2 minutes was very strange.

The queue is looking less lopsided now too.


----------



## jaeyon (3 April 2008)

wilko66 said:


> Well it's been over 20 minutes now.
> 
> ASX query to CNP who request time to respond is my understanding
> 
> ...




agreed, that was a large drop even before the halt was called. however from looking at the market depth so far, and the current bid ask spread (all on comsec)

bids outweigh offers and the current bid price is .75 where offer is .3

also note that the bid price has risen since the trading halt (i think it was around .65 at the start of the halt)


----------



## Joe Blow (3 April 2008)

Just a reminder to all particpants in this thread that posts with no or extremely low content will be removed. So will ramps.

If you have something of value to add to the thread, please do so. If you have nothing of value to add, perhaps it is better to remain silent until you do.

Thank you all for your co-operation in maintaining the quality of posting in this thread.


----------



## hsv2001 (3 April 2008)

jaeyon said:


> agreed, that was a large drop even before the halt was called. however from looking at the market depth so far, and the current bid ask spread (all on comsec)
> 
> bids outweigh offers and the current bid price is .75 where offer is .3
> 
> also note that the bid price has risen since the trading halt (i think it was around .65 at the start of the halt)




The quantity of low offers far exceeds the quantity of higher bids, there is one bid at $1.00 however only wanting 1000 shares, whereas there is 330000 shares wanting to be sold at 43 cents.

From experience i'm not getting too excited at the moment.


----------



## metric (3 April 2008)

considering the speed of which the price went from 53c(?) to 65c, and the greater speed it went from 65 to 50.5, is  that something the asx or governing body should look into?

is this what the asx is asking of centro on the cnp ann on the asx site?


----------



## hsv2001 (3 April 2008)

Just found this article listed at 12:38pm AEDT from the Dow Jones Newswires,

DJ Centro Properties Halted In Response To ASX Price Query
03/04/2008 12:38PM AEST



MELBOURNE (Dow Jones)--Shares in Centro Properties Group (CNP.AU) were Thursday placed in a trading halt, pending a response from the Australian Securities Exchange to a surge in its share price of as much as 120%.

Shares in the cash-strapped retail-property firm jumped to a 6-week high after reports that potential suitors have submitted bids.

At 0221, trading in the shares was halted at 50.5 cents, up 71% on the day after rising as high as 65 cents.

Without citing its sources, The Australian Financial Review reported earlier Thursday that Centro Properties had received six bids, with the interest understood to be around buying up Centro shares at a maximum of 90 Australian cents a share.

The Wall Street Journal reported at least five suitors have submitted preliminary bids to purchase the entirety of Centro Properties, but Centro isn't resigned to selling itself at a fire-sale price, the newspaper said, citing people familiar with the situation.



-By Susan Murdoch, Dow Jones Newswires; 61-3-9671-4393; susan.murdoch@dowjones.com



(END) Dow Jones Newswires

April 02, 2008 22:38 ET (02:38 GMT)

Copyright (c) 2008 Dow Jones & Company, Inc.


----------



## traderboy (3 April 2008)

Well after massive gains today, both CNP and CER are now on a trading halt.

Will be interested to see what happens either later today or Friday morning when trading resumes

Any thoughts?


----------



## metric (3 April 2008)

im new to this stuff. im not sure how relevant it is but centro have now also requested a trading halt. it has come after the earlier ann of a trading halt by the asx.

is there anything to read into this? the ann is on the asx site.

http://www.asx.com.au/asx/research/...panyName=&principalActivity=&industryGroup=NO


----------



## jaeyon (3 April 2008)

metric said:


> im new to this stuff. im not sure how relevant it is but centro have now also requested a trading halt. it has come after the earlier ann of a trading halt by the asx.
> 
> is there anything to read into this? the ann is on the asx site.
> 
> http://www.asx.com.au/asx/research/...panyName=&principalActivity=&industryGroup=NO




trading halt me thinks would have been called at roughly the same time for both cer and cnp. the halt has been called because asx is requesting these 2 companies to explain the sudden (and large) increase in shareprices today.

only thing to do now is to wait until the halt is released, hopefully today but as trading is only open for a bit over an hour left today, me thinks the halt will be released tomorrow


----------



## jaeyon (3 April 2008)

was looking through the course of sales for cnp and it was interesting to see that by 10am, the pre open offers were already around the 35c mark.

couldnt see any huge sales today, but also found it weird to see that there wasnt any real reason for the share price to drop so fast just before the halt (except maybe that cnp shareholders got word shareprice was on the way up and wanted to get out)


----------



## Trojax (3 April 2008)

Look at the media, from Melbourne to New York the financials are teeming with 'confirmations' of offers for takeover, all the while CNP say nothing officially.. IMO the price has skyrocketed due to this speculation of an announcement and I am very sure a lot of shorts sellers (official or loaned off market) would have panicked and rushed in to close out potentially losing positions, hence the massive volatility before halt.

Someone above mentioned the buy sell queue, doesn't mean anything in this kind of situation as when runs red hot like that people are in and out in split seconds, what your seeing is leftovers from the decline of covering shorts and I would imagine some day traders taking their profits though could go either way when she reopens, it depends on whats announced... IF Centro as part of the response to the ASX actually do offer a response such as 'due to speculation of bids' then in a seperate announcement make a formal release of where things are at in the current process then that'd help curtail the journo's speculations.

That said, given the media today I'd say they almost must now say officially whose bid on what and at how much etc. Or at least confirm whether or not firm locked in bids are on hand. More than likely for any bidders there would be some confidentiality clause as part of the process to prevent a bidding war, but really they can't keep where the process is at under lock and key forever, look at what happened today just on the sniff of something happening.


----------



## vida (3 April 2008)

DId anyone sell out and make a lot of money here today? I had a feeling it was not going to last and I was going to sell but kept thinking 'will wait a bit longer' and also i was busy at work: then the slide and trading halt.  THat's the way the cookie crumbles.  I hope its going to go well for us tomorrow.  I think I will sell next time the SP soars as it is too stressful and I need to reinvest in more stable unindebted and unendangered companies after this year. This is too much stress for a person like me who does not need high BP


----------



## Birdster (3 April 2008)

Centro respone to ASX query is out. Is claims the discussions with "parties and lenders" remain incomplete.

What a ramp from afr! They must of known that the article would cause a flurry!  

Here is the link to the ann;

http://www.asx.com.au/asx/statistic...rchByCode&releasedDuringCode=W&issuerCode=CNP


----------



## jaeyon (3 April 2008)

Birdster said:


> Centro respone to ASX query is out. Is claims the discussions with "parties and lenders" remain incomplete.
> 
> What a ramp from afr! They must of known that the article would cause a flurry!
> 
> ...




oh no. lets see how it opens tomorrow morning. what are some opinions here? hold or sell. i think ill hang onto mine to see how tomorrow unfolds


----------



## metric (3 April 2008)

im not sure we are allowed to offer opinion on selling or buying? 

however, im going to hold. that news story today that caused all the fuss would have held a large element of fact. only the author probably didnt have the proof/permission to release the story.

i think the SP will fall dramatically when it opens. but if centro announces something simmilar to todays news story, next week, or within the next month, we have already seen what may happen. 

remember braveheart, calling to his soldiers in the face of overwhelming odds charging at them......? he yelled  "hold....., hold......, hold....."


----------



## reece55 (3 April 2008)

jaeyon said:


> oh no. lets see how it opens tomorrow morning. what are some opinions here? hold or sell. i think ill hang onto mine to see how tomorrow unfolds




Careful here jaeyon, remember no one can tell you what to do with your shares unless they are appropriately licensed and I can't see anyone on here doing that for free!

If we are going to have a chat about CNP, lets keep to why you think you should hang on i.e. some actual technical or fundamental reasons to do so...

Bottom line out of the announcement in response to the query - looks like the rumour mill is running wild - it is really anyones guess where the share price will end up tomorrow! The announcement is a standard "we don't know", which could mean anything.....

Cheers


----------



## Birdster (3 April 2008)

jaeyon said:


> oh no. lets see how it opens tomorrow morning. what are some opinions here? hold or sell. i think ill hang onto mine to see how tomorrow unfolds




IMO, If some company says they are willing to pay .90 cents, then isn't that the lowest price? I would assume that the next step of the "incomplete discusions" would be an offer/ amount from Centro. My speculation would be a figure that of the value of the book price. the the party(ies) would counter offer and so on...

This of course would happen w/out anns till an agreement was reached. 

Mind you, this is all spec. and is only my opinion using the information supplied from the afr column today and the ann response from Centro released today. Anything can happen. 

As nearly always, I am wrong, so DOYR!


----------



## reece55 (3 April 2008)

Birdster said:


> IMO, If some company says they are willing to pay .90 cents, then isn't that the lowest price? I would assume that the next step of the "incomplete discusions" would be an offer/ amount from Centro. My speculation would be a figure that of the value of the book price. the the party(ies) would counter offer and so on...
> 
> This of course would happen w/out anns till an agreement was reached.
> 
> ...




Birdster, the article, which mind you is sheer speculation, said that the TOP bid is 90 cents - this means this is the ceiling, not the floor.....

What makes you think the next step is necessarily an offer? The market has known that they have been in discussions with lenders and related parties for weeks.... Why is the price likely to be at book value - is there any logical reason to this view or facts that support your argument?????

As I said previously, if we are going to chat about CNP, lets hear some new, relevant information fleshed out.

Cheers Guys


----------



## nioka (3 April 2008)

Birdster said:


> What a ramp from afr! They must of known that the article would cause a flurry!




 AFR are not in the habit of ramping. I expect there is some truth in their story and it is probably from a leak in the system. Possibly a deliberate leak. CNP are probably not in a position to give out any more information than they have done so far and probably will not do so until they have definite offers to make public. There are quite a few different opinions as to the value of CNP and, along with many others I have my own idea and a price that I will sell at. I intend to hold out for that. I'd like to think that CNP will continue in business and only sell the overseas assets. They have a good cash flow and should recover given time and a cooperating bank. Banks like cash flow and i can't see why CNP wouldnt be a good bank customer in the future.


----------



## Birdster (3 April 2008)

reece55 said:


> Birdster, the article, which mind you is sheer speculation, said that the TOP bid is 90 cents - this means this is the ceiling, not the floor.....
> 
> What makes you think the next step is necessarily an offer? The market has known that they have been in discussions with lenders and related parties for weeks.... Why is the price likely to be at book value - is there any logical reason to this view or facts that support your argument?????
> 
> ...




It is logical to assume that negotiations are in place with the words "incomplete discussions" As with stating a price of book value was only speculitive, nothing more, nothing less, it was an opinion. It is OK to give an opinion isn't it? 

If you are speculating that the article is "sheer speculation"??? That is giving your opinion just as I have. It's an opinion.

It's more the negotions process I'm talking about. Similar to negotiating buying property. Two parties, one makes an offer, and then it is counter offered. Simple business practice. I stated that I used the facts from both afr and Centro to speculate my opinion.



nioka said:


> AFR are not in the habit of ramping. I expect there is some truth in their story and it is probably from a leak in the system. Possibly a deliberate leak....




Yes I agree Noika. It was more tounge in cheek that it was a ramp. But the article is the cause of the buying. I should of worded it better.


----------



## jaeyon (3 April 2008)

reece55 said:


> Careful here jaeyon, remember no one can tell you what to do with your shares unless they are appropriately licensed and I can't see anyone on here doing that for free!
> 
> If we are going to have a chat about CNP, lets keep to why you think you should hang on i.e. some actual technical or fundamental reasons to do so...
> 
> ...




oh right sorry im new to the forums haha (ill admit i didnt fully read the terms and conditions )

now not quite related to CNP but its interesting to note the effect that the afr article had on CNP's share price movements today.

for those in the know, do the journos for afr undergo some kind of screen before they are allowed to publish in the afr. main reason for concern is that if a journalist owns shares in a company, they could exaggerate (not fabricate) information regarding the company and make a profit for themselves.

id like to think that the journos are ethical in this manner however its a dog eat dog world and someones gotta lose out.


----------



## reece55 (3 April 2008)

Birdster said:


> It is logical to assume that negotiations are in place with the words "incomplete discussions" As with stating a price of book value was only speculitive, nothing more, nothing less, it was an opinion. It is OK to give an opinion isn't it?




I don't think it is Birdster. To quote Centro directly, who are essentially warning investors at this point, "At this time, there is no certainty or assurance that these discussions will lead to a transaction...."

Opinions are absolutely fine, in fact obviously that's what we are here for. But what I would be looking for is something that supports your opinion : i.e. cash flow numbers, comparable sales, etc.....

The bloomberg article for everyone is here

Cheers


----------



## prawn_86 (3 April 2008)

jaeyon said:


> oh right sorry im new to the forums haha (ill admit i didnt fully read the terms and conditions )
> 
> now not quite related to CNP but its interesting to note the effect that the afr article had on CNP's share price movements today.
> 
> ...




Im fairly certain that journos have to disclose if they own shares in that particular company they are writing about.

Although the shares could be in a company name or the wifes name and they wouldnt have to


----------



## reece55 (3 April 2008)

jaeyon said:


> oh right sorry im new to the forums haha (ill admit i didnt fully read the terms and conditions )
> 
> now not quite related to CNP but its interesting to note the effect that the afr article had on CNP's share price movements today.
> 
> ...




No worries jaeyon, welcome on board then, I haven't seen you before myself so good to have you on the site....  I'm sure we have all been guilty of not reading the fine print in our lives (at least most of us didn't do it in relation to our margin loans with Opes Prime!!!!)....

I'm not sure about the jurno screening, but the issue you raise is part of the reason why one has to be careful with this stock - the price hike looks to be heavily weighted to the AFR article and we don't know what vested interests the writers or indeed the press in general may have in this equation other than selling papers.... The last thing this stock needs at the moment is ramping, seems the AFR have done the job already!!!! 

Cheers


----------



## Trader52 (3 April 2008)

I have attended courses in negotiating and have been party to legal settlement negotiations.  For what it is worth, this is my view of the negotiation process.

The price that you offer at the start is lower then what you may be prepared to pay.  Often, the final price is within the middle 50% of the difference between your opening offer and what the seller indicates they want.  So IF an offer of .90c a share has been made (I am only going on the news stories for that figure) then that will set the low base.  If Centro is saying that the real value of its net assets is above that (for example $1.50), then it is usual for the agreed final price to be in the range of $1.05 to $1.35.

The above is just an example of how the process may go.  I don’t know the actual baseline bid and offer.  Centro has other options (partial sale etc).

By the way, don’t try too hard to apply logic only to SP.  SP is a combination of logic and emotion.

Fire away!


----------



## jaeyon (3 April 2008)

Trader52 said:


> I have attended courses in negotiating and have been party to legal settlement negotiations.  For what it is worth, this is my view of the negotiation process.
> 
> The price that you offer at the start is lower then what you may be prepared to pay.  Often, the final price is within the middle 50% of the difference between your opening offer and what the seller indicates they want.  So IF an offer of .90c a share has been made (I am only going on the news stories for that figure) then that will set the low base.  If Centro is saying that the real value of its net assets is above that (for example $1.50), then it is usual for the agreed final price to be in the range of $1.05 to $1.35.
> 
> ...




i think all who hold cnp(including me) hopes this happen so we can get out! 

main concerns regarding todays afr article is that the source has not been disclosed. also, the cnn article above also states that one of the potential bidders denies they have made an offer (though mqg and another have declined to IMMEDIATELY comment).

interesting article on todays movement "here"

note that the article mentions CNP loans extended till 30 sept so me thinks that there is still some hope in CNP yet, however this might also be because they want to avoid larger losses


----------



## Rocket man (3 April 2008)

I am taking the view that this AFR reporter did not pull the 90c figure from his behind, Its a respected publication. I also saw some EXTREMELY strong buying today that was not just your comsec traders .. I reckon huge insto buying. 

So.. given that the market is now aware of negotiations at or around this price then I think a CNP will dip tomorrow from profit takers but eventually track up in anticipation of announcement. There is a lot of upside potential .. and announcment will generally expected by the market I think.


----------



## vida (3 April 2008)

I am thinking it might have been wise of me to have sold out today, if not for the trading halt I would have probably done that. Its too hard when it all happens so fast and one is at work doing things that are necessary to make a living and one cannot focus properly on the market as it rockets and dives.

Its so unfair  It seemed that it was only moments that I was thinking about selling and just coming to terms with it as it was so unexpected when all the action stopped and I was dead in my tracks and thought no more.. of course profit taking took over before the halt and again it will do so tomorrow.

I wonder who was buying up as it was massive quantities and amounts of money and whoever was buying at upwards trending SP would have been expecting a continuing trend upwards, is this when short sellers lose money?

Woosh....


----------



## vida (3 April 2008)

A snippet from "Egoli" website says:   "Major banks also advanced on optimism generated by hopes that Centro Properties would be taken over, potentially avoiding writedowns for the banks." 

So it seems that the CNP spike is far reaching and the banks would be wanting it to do well for their investors' sake as are all the stakeholders.

Where there is optimistic smoke there may be something to it. CNP are keeping a low profile around the speculations which is very commendable.

There is plenty of time for CNP to get the best deal and if anyone can do it they can.


----------



## vida (3 April 2008)

If the SP rose to or even above .90 cents over the next days, would that encourage the bidders to increase their offer? Does the current SP have a bearing on the valuation made by the bidders who at present would be trying to get a super bargain seeing an opportunity with the pressure CNP is under.

I am not quite sure how it all works with valuing the company and how the low SP may weigh on that valuation.  Since it has improved today does that increase the attractiveness of CNP to the bidders whereby they may increase their offer(s)?  

I am not terribly well educated in finance, equities and business.  Probably I should not be dabbling at all with my level of knowledge but live do & learn.


----------



## Julia (3 April 2008)

vida said:


> .
> 
> Its so unfair
> Woosh....



Sorry, Vida, but I had to smile at this.
Had a picture of the share market just being out to get you in a totally personal way!
Might be good to dispel any notion of the market being "fair" to any individual.
Cheers
Julia


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## nioka (3 April 2008)

A retired bank manager has suggested to me that in the circumstances where CNP have income which is capable of continuing to service the interest on the loans it is normal to have the loans extended for short periods and then reviewed regularly. I can not see where CNP has defaulted on interest payments and they are only having trouble refinancing existing loans. Has anyone seen any evidence that they would not be capable of meeting interest commitments. After all the banks need to have loans out earning interest for them. 
 It would be interesting to know who the buyers were today. If there was no insider trading it would be the surprise of the week.


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## jaeyon (3 April 2008)

vida said:


> If the SP rose to or even above .90 cents over the next days, would that encourage the bidders to increase their offer? Does the current SP have a bearing on the valuation made by the bidders who at present would be trying to get a super bargain seeing an opportunity with the pressure CNP is under.
> 
> I am not quite sure how it all works with valuing the company and how the low SP may weigh on that valuation.  Since it has improved today does that increase the attractiveness of CNP to the bidders whereby they may increase their offer(s)?
> 
> I am not terribly well educated in finance, equities and business.  Probably I should not be dabbling at all with my level of knowledge but live do & learn.




i think potential buyers of cnp (i.e. mqg if true) would have kept a keen eye on cnps share price today, however i think one of the above mentioned articles notes that when valuing a company such as cnp, it is hard to do so without taking into account the debt that it is carrying. 

there is optimism yet as all centro's 8 lenders agreed to extend the deadline, and as mentioned if a company is generating positive cashflows there is still hope (whether or not it recovers to its previous share price before the credit crisis is another matter which only time will tell)


----------



## Ruprect (3 April 2008)

I dont hold here but was watching closely this afternoon - anyone care to comment on the move from 50c to 65c then back to 48-50c all within the space of 4 mins and on massive volume?

Ive not seen a major stock move so quickly with such massive volume too.

Im not into conspiracy theories, but i wouldnt mind an explanation from someone!


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## oldblue (4 April 2008)

You don't need to believe in any conspiracy theories to "follow" CNP's SP gyrations. A read of the last 2-3 pages of this thread shows the wide variations in assessments of CNP value and prospects/outcomes.
The end result ( at present ) is that no-one knows the full story and this causes rampant speculation. All very much to be expected in the circumstances.


----------



## metric (4 April 2008)

i notice the red 'TRADING HALT' announcement on the comsec cnp page is gone. i suppose that means cnp is to open today with the market. it will be very interesting to see at what price cnp opens at, and how it fares today.


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## moneymajix (4 April 2008)

*Re: CNP - TH, bids ...*

The 90c valuation figure has showed up again in The Age today. 
(AFR mentioned 90c also the other day).


http://business.theage.com.au/rescue-bids-halt-trading-in-centro-shares/20080403-23iu.html


*Rescue bids halt trading in Centro shares*

Natalie Craig and Eli Greenblat 

April 4, 2008



> CENTRO Properties Group has said it remained without a binding deal to save it, despite speculation one was about to be reached.
> 
> The embattled shopping centre owner and manager and its satellite, Centro Retail Group, were forced to call a trading halt in their shares yesterday when a report said as many as six groups had lodged their rescue bids for the property business.
> 
> *The bids took a variety of forms, from recapitalisation to a purchase of some or all of the shopping centre assets, but they all valued Centro Properties' stock at a maximum of 90¢ each.*


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## nioka (4 April 2008)

The indicative price for CNP shows a drop of 7.5c on opening at this stage. I showed even 10 mins ago????????


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## jaeyon (4 April 2008)

nioka said:


> The indicative price for CNP shows a drop of 7.5c on opening at this stage. I showed even 10 mins ago????????




yep opened at 44.5c today, down from 50.5c at time of the halt yesterday.

wonder if this article will induce the same SP movements as yesterday


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## metric (4 April 2008)

jaeyon said:


> yep opened at 44.5c today, down from 50.5c at time of the halt yesterday.
> 
> wonder if this article will induce the same SP movements as yesterday




i didnt think it would happen. but its shooting up now. 50c when i started writing this post. it 53c now. on the way up again...wow!


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## moneymajix (4 April 2008)

Yep, more thrills.

50+ million in volume in just over half an hour.

Volatile. 

It was green and hit high of 53.5c. 

Low 40c.



Who is doing all this buying?


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## sting (4 April 2008)

76 + million and back to 44.5.... this is all over the place but one thing that I have noticed tho that the price drops have been initiated by small amounts on the sell side  which causes a flow on effect to be followed by larger buy orders.

Its as if xyz holder puts on the market small parcels of shares at reduced prices waits for the flow on effect and then buys up big at reduced prices.

The above is a theory only and is purely my opinion with no proof to substantiate it but would like to see if others agree with me. If I am correct someone out there is trying to buy up big at cheap prices quickly before they have to declare.

SEMPER UBI SUB UBI


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## vida (4 April 2008)

It appears the profit taking and buying has eased up and stabilised the SP for today. The rumours have not been confirmed nor absolutely denied so the SP has stopped soaring but is not diving either which is a good base to give the investors time to decide where they stand. 

It is looking good for those who bought in recently regardless of the uncertainty and there is time for CNP to negotiate a good deal and make a strong forward going announcement on which the sp may rocket. There is only so much a rumour can do and if nothing confirmed then its effects will dissipate pretty quickly I would think.

I have read that we should buy on fact and sell on rumour to make money in the market.  It was a great time to sell yesterday for recent investors but also it appears a good time to buy for many who snapped up lots of stock as the SP rose.  There is obviously confidence that there is a lot more upside.


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## oldblue (4 April 2008)

It really  "all Depends ", vida.

The old adage was " Buy the rumour, Sell the fact ". This may have been temporarily suspended by market conditions but in my experience, its generally pretty sound philosophy. If philosophy is the right word.


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## prawn_86 (4 April 2008)

Just to let you know guys,

Any further posts with just price or volume commentary or low content posts which do not add any detail or analysis will be removed.

People can easily check the price themselves...

thanks

Prawn


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## nioka (4 April 2008)

The sales for the day have passed the 100,000,000 mark. That is a fair percentage of the companies shares. There will be a percentage of day trading but the ownership of the company has dramatically changed hands in the last day or two. It will be interesting to see if any majority shareholder notices come out in the next few days. Is someone building a long term holding? Is there any insider influence? Who knows what?
 I note that CNP is not one of the companies listed on the Opes thread as being one sold on account of ANZ. I had expected that would have been one.


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## YELNATS (4 April 2008)

*Re: CNP - TH, bids ...*



moneymajix said:


> The 90c valuation figure has showed up again in The Age today.
> (AFR mentioned 90c also the other day).
> 
> 
> ...




Just noting that The Age article indicated a valuation of 90 cents "maximum", ie value could be under 90 cents.

Quote
The bids took a variety of forms, from recapitalisation to a purchase of some or all of the shopping centre assets, but they all valued Centro Properties' stock at a maximum of 90 ¢ each
Unquote

(my bold & underline)


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## MRC & Co (4 April 2008)

moneymajix said:


> Who is doing all this buying?




Probably those who were worried they may miss out on some easy profits!

Closed near the low on high volume, technically a bad sign.  Wouldnt like to be holding this one over the weekend, if your only in it for some quick profits!


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## sting (4 April 2008)

Surely the extordinary high trade numbers cant be from mum&dad investors or day traders it has to be either insto's getting out or getting in. Lets hope its the latter. IMO they had a go yesterday and buying pressure put it through the roof day it loks like carefully strategic buy/sell/buy combinations has enabled the price to be kept low but turnover is equal to yesterday's buy up.

Could one of the suspected bidders interested in bailing out/buying out be able to gain enough shares to seriously influence the boards descision I suspect it would require a far greater buy up than what we have seen so far if I am right we should see the same scenario as yesterday and today over the coming days


SEMPER UBI SUB UBI


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## vida (4 April 2008)

Source: News Bites
Orbis Global Equity Fund bought 26,435,953 Centro Retail Group securities worth $8,684,157 on April 1, increasing from 117,405,616 securities (5.14%) to 143,841,569 securities (8.29%).
STOCK DASHBOARD: April 03, 2008

that is a vote of confidence ...


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## Rocket man (5 April 2008)

I agree Vida .. thats a big vote of confidence especially for such a volatile share as CNP

The way I see it .. you take a punt at 35-40c and chances of making 50% + are probable IMO.... high risk of course.. not for the nervous nellies


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## vida (5 April 2008)

Yep and some people would have made 300% profit if they bought at .23c in past several days and sold at .65 last thursday.  Those that were quick and stuck to their PCs for the right hours on the right days could have done this.

I am a nervous nellie at times too Rocket Man  but not all the time, I have moments where my confidence is shaken but mostly I am quite steady and trust things will work out in the long term.  Unfortuanately I have long term sights at times when short term gains should be taken.  I am trying to readjust my thinking along these lines as great short term opportunities sometimes prove more profitable than any long term investment

The thing is to have the mindset to take the opportunity when one sees it. I saw the CNP sp rise to above .70c a while ago and I coudl have sold at a nice profit and then again to .65 last thursday and I just watched it.  I would have been very happy today if I had sold out but am still in and holding, keeping the risk alive but it may work out.  In meantime I am trying to change my strategy of longterm as it doesn't suit all stocks in my porfolio, only some.

Best wishes





Rocket man said:


> I agree Vida .. thats a big vote of confidence especially for such a volatile share as CNP
> 
> The way I see it .. you take a punt at 35-40c and chances of making 50% + are probable IMO.... high risk of course.. not for the nervous nellies


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## Lavender689 (6 April 2008)

CER or CNP at the current price levels:

It seems that if someone wants to make quick profit to cover their losses on CNP, it is lower risk to buy CER at 0.34-35/share (Friday close level) than buying CNP at above 40 cents. SP of CER seems to be far less volatile than CNP. If there is positive news/unconfirmed rumours, both seem to be going up quite substantially. This is despite that trading volume of CNP is far higher than CER.   

This is just my personal observation. 
Can anyone pls share their view on this?  Thanks, Lavender689.


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## metric (7 April 2008)

ive noticed centro cnp isnt trading yet. does anyone know why? ive looked on the asx, centro site, plugger, businesspectator. no news.

could the ann we are hoping for, about to be released?


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## vida (7 April 2008)

Is anything trading yet?  Its only 9.11 am by my clock.  
Have you adjusted for end of daylight saving?



metric said:


> ive noticed centro cnp isnt trading yet. does anyone know why? ive looked on the asx, centro site, plugger, businesspectator. no news.
> 
> could the ann we are hoping for, about to be released?


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## yang (7 April 2008)

haha... I was about to say the same thing....

tis still in pre- open metric

0.41 indicative price

yang


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## metric (7 April 2008)

um....sorry. up here in qld, we dont have DS. but i should have realised as the morning show mentioned NSW was now off DS. oh well, no ann...just havta wait longer..


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## metric (7 April 2008)

centro is on the rise again. its gone up 5c (to 46.5c) in the last few minutes. ive looked at the news sites and the asx and centro site. i cant find a reason. the buy/sell ratio has improved dramatically. dont know why that is either....


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## hsv2001 (7 April 2008)

metric said:


> centro is on the rise again. its gone up 5c (to 46.5c) in the last few minutes. ive looked at the news sites and the asx and centro site. i cant find a reason. the buy/sell ratio has improved dramatically. dont know why that is either....




Definately some abnormal trading considering all morning it was only hovering around the 41 - 43 mark, and as you said the sell/buy ratio is greatly increased. Perhaps the investors or potential takeover companies are getting in early???


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## vida (7 April 2008)

We know that deals are being negotiated behind the scenes but we don't know details or anything definite. The AFR article proposing a deal was denied as there was no definite agreement about any transaction to report, but that doesn't mean that it is not potentially going to happen and rumours have a way of becoming facts before long. This is what the trading is relying on I would think, I could be wrong. An announcement is pending about it.

They have refinancing extension to Sept pretty much which is a very positive step but this has not yet been officially announced which will probably happen late in the month. The last extension confirmation was announced on the very last day and it may happen this way again. I guess CNP want to use every possible day they have to get the best deal on it and why do it before expiry date if they may do better taking more time.

CNP are not in a rush, 'haste makes waste' and want to extract every bit of value from every bit of time they have been granted and everyone is patient



hsv2001 said:


> Definately some abnormal trading considering all morning it was only hovering around the 41 - 43 mark, and as you said the sell/buy ratio is greatly increased. Perhaps the investors or potential takeover companies are getting in early???


----------



## Trojax (7 April 2008)

hsv2001 said:


> Definately some abnormal trading considering all morning it was only hovering around the 41 - 43 mark, and as you said the sell/buy ratio is greatly increased. Perhaps the investors or potential takeover companies are getting in early???




It's difficult to know, the sentiment certainly seems to be adjusting which is reflecting in the current SP. I don't think it would be unreasonable if there were takeover companies waiting to accumulate on market at a discount as it's a given whatever the banks would be wanting will be significantly higher off market, however that said we'd expect to have a new major shareholder notice which we don't have (not to say couldn't in future, just stating as of now).

Primarly I believe it's speculation still around the news article from AFR re the confirming offers and the idea they will have to September soon, bit of jockeying by the insto's perhaps in anticipation for a sentiment run.

--

Vida I chuckled at your other post re the watched it go up and did nothing, I was well over my stop profit on averaged buy ins by 30%, lappy on, in my trading account and could have sold out any time and didn't, haha. I believe in the recovery (as stated 50 times above for various reasons) and guess in some ways I'd like to see it happen and willing to see it through to the end (hopefully not THE end if you know what I mean).


----------



## vida (8 April 2008)

Funny but no comments here on the SP strengthening somewhat today. Yes I think its the recent AFR article still resonating and belief there is something positive about to unleash in an announcement before long. There are profit takers selling and I don't blame them, others buying to make money on this later and those like me and Trojax holding patiently passing up quickies



Trojax said:


> It's difficult to know, the sentiment certainly seems to be adjusting which is reflecting in the current SP. I don't think it would be unreasonable if there were takeover companies waiting to accumulate on market at a discount as it's a given whatever the banks would be wanting will be significantly higher off market, however that said we'd expect to have a new major shareholder notice which we don't have (not to say couldn't in future, just stating as of now).
> 
> Primarly I believe it's speculation still around the news article from AFR re the confirming offers and the idea they will have to September soon, bit of jockeying by the insto's perhaps in anticipation for a sentiment run.
> 
> ...


----------



## metric (10 April 2008)

its been reported on another forum that westfield (the poster thinks) was named on sky business news as interested in buying some lpt's in centro.

looking at recent history between westfield and centro, it is quite possible..

http://www.news.com.au/business/story/0,23636,22940812-462,00.html

could be an interesting day.


----------



## Trojax (10 April 2008)

metric said:


> its been reported on another forum that westfield (the poster thinks) was named on sky business news as interested in buying some lpt's in centro.
> 
> looking at recent history between westfield and centro, it is quite possible..
> 
> ...




Hmm Westfield have made it pretty clear _publicly_ they're not interested in CNP's assets, that they consider most outside their internal quality critera apart from a handful of 'prize' centres which no doubt they'd have been happy to snap up if the banks ran into admin and fire sold them. This could be spin to keep the price down but we've seen no indications that they're the least likely to put their hand up (I gather unless it was at a savaged discount to what they sold many of their previous assets to Centro for).

However, it appears the banks aren't about to give away equity, why would they, the lenders are the owners in the case of many of the banks onboard, in total insto's own 70% of the company and to fire sale it would be hurting themselves as much as the average punter. 

We have a number of possible announcements for this month coming, ie a refin, put into admin, a part sale, takeover offer or an extension to match the US noteholders, one of these has to happen, as to which one.. 

The markets betting on the extension path or the offer path by their reaction to media reports, I'd say the extension is my position and that itself is still good news, what Centro needs is time to ride the storm out of the credit markets. If they can do that intact It'd be good for the banks, good for the shareholders, good for the lenders and not so good for lost opportunities for those who 'may or may not' have put a vulture price on the shares for the bids that may or may not have been placed.

To not add rumor, but it was 'reported' as we know (without confirmation)  that a .90 price may or may not have been on the table. That's a market value of about 800 million bucks. Centro own 24 billion, 17 billion debt, 7 billion in net equity. If I was a lender and a shareholder like CBA I'd have laughed..sure..ok buddy.. I'II take my 800million and give you 7 billion... or alternatively I give you a one finger salute and talk to my banks buddies cause we all got in at many dollars per share and we want some of that back. 

Reality is banks wont accept any table offer that's below the value of the group if they put it into admin themselves, though they don't want to go into admin hence the two extensions and possibly third.. so what happens.. tread water until the tide changes 

That's my opinion on what will happen for the company though not related to the SP up or down, could go anywhere, dyor for that.


----------



## vida (10 April 2008)

Exactly, $800 million offer is peanuts and is a total waste of paper and legal fees for those companies who had their lawyers slave away day and night doing the due diligence and drafting the offer documents etc: lawyers gain

There is a rumour that the credit crunch is easing up so in time maybe even months away things will be better and after the next debt payment extension is settled and confirmed there will be a refinancing possible and all blue sky..

who knows, all I know is that I work each day and don't depend on CNP 

always a day away 




Trojax said:


> Hmm Westfield have made it pretty clear _publicly_ they're not interested in CNP's assets, that they consider most outside their internal quality critera apart from a handful of 'prize' centres which no doubt they'd have been happy to snap up if the banks ran into admin and fire sold them. This could be spin to keep the price down but we've seen no indications that they're the least likely to put their hand up (I gather unless it was at a savaged discount to what they sold many of their previous assets to Centro for).
> 
> However, it appears the banks aren't about to give away equity, why would they, the lenders are the owners in the case of many of the banks onboard, in total insto's own 70% of the company and to fire sale it would be hurting themselves as much as the average punter.
> 
> ...


----------



## eMark (13 April 2008)

A rumour....??

Macquarie acquiring Centro Properties

http://www.thestreet.com/s/kass-10-rumors-making-the-rounds/newsanalysis/investing/10411618.html?puc=googlefi&cm_ven=GOOGLEFI&cm_cat=FREE&cm_ite=NA


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## redandgreen (13 April 2008)

interesting..............

wonder if the AFR chooses to regurgitate the rumour tomorrow.

Quite likely that there will be an annoucement of some kind sooner rather than later.  An interesting week ahead

Holding in anticipation of great things


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## eMark (13 April 2008)

Big Bad Sammus said:


> I heard on the grape vine 2 weeks ago that CNP was going to get their debt extention till end of April, then I heard today from the same very reliable source that it will be extended till September.
> 
> Glenn Rufrano will return on Friday, so fingers crossed on Monday there will be a great announcement that he will have found a bank in the US to help their debt situation.
> 
> ...




I don't know where this poster has disappeared too, but his predictions re April proved correct "from a reliable source", let's hope his second and third predictions re September, and a share price of $1.08 prove correct too....


----------



## Ang (13 April 2008)

The Rumours are half right, I have been able to get some info, and Macquarie is part of the takeover; however there are two camps at the moment. The First State camp, which involves the Commonwealth Bank and the Macquarie camp. It is muted that the two opposing bids and capital restructures are complex and very political due to the opposing banks evolved. I think this will be healthy as there will now be a bidding war on the two opposing bids which is too political to make any sort of announcements while you have your financer on one side of the bidding fence and another bank on the other side. I would say we will be waiting for the final week unless CNP wants to announce the extension first.
kind reg
ang01


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## snowblind (14 April 2008)

Hi all,
The following came through on Wed 9th April in the Wall Street Journal,

Centro Properties Group, a debt-laden Australian real-estate investment trust that owns 682 shopping centers in the U.S., faces an April 30 deadline to present a plan for repaying $3.4 billion in short-term debt that it failed to pay on time earlier this year. The company recently attracted preliminary buyout bids averaging $1 per share, according to people familiar with the matter, far less than the 10 Australian dollars (US$9.27) per share it traded for last.......

It basically re-iteterates the AFR report or does it?

What I really want to know is why would anyone be selling this stock at current levels when reports are coming through like these? Thanks.


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## vida (14 April 2008)

That's easy to see why people are selling at these levels, they are taking a certain profit if they bought anywhere from 23 cents to below what is current SP and there were many trades in those SP regions.  A bird in the hand is worth two in the bush.  We are trying for two in the bush 



snowblind said:


> Hi all,
> The following came through on Wed 9th April in the Wall Street Journal,
> 
> Centro Properties Group, a debt-laden Australian real-estate investment trust that owns 682 shopping centers in the U.S., faces an April 30 deadline to present a plan for repaying $3.4 billion in short-term debt that it failed to pay on time earlier this year. The company recently attracted preliminary buyout bids averaging $1 per share, according to people familiar with the matter, far less than the 10 Australian dollars (US$9.27) per share it traded for last.......
> ...


----------



## metric (15 April 2008)

good article. it gives an indication of the relatively strong position centro is in.

http://www.businessspectator.com.au/bs.nsf/Article/Why-Centro-is-still-kicking-DPALB?OpenDocument



> WHY CENTRO IS STILL KICKING
> 
> Given the state of the Australian and US share markets there is very little chance that by the April 30 banking deadline a proposal will be put before Centro directors and bankers that offers a big equity payout. Most of the proposals that have been put forward so far have been either for parts of the operation, or very complex in the way they structure any rewards for shareholders.
> 
> ...


----------



## metric (15 April 2008)

you will find that i posted this exact article a couple of hours ago at 855 am. the post before dingos...

it is definately a possitive article for centro. good to see that shareholders are in such a strong position, and the banks have such a weak one.


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## Joe Blow (15 April 2008)

metric said:


> you will find that i posted this exact article a couple of hours ago at 855 am. the post before dingos...
> 
> it is definately a possitive article for centro. good to see that shareholders are in such a strong position, and the banks have such a weak one.




Given that the article was posted earlier, I have removed Dingo's posts. No point in having the same information posted twice.


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## dingo37 (16 April 2008)

1:21 PM Apr 16, 2008 Robert Gottliebsen
Centro's lifeline
TOP News

:bananasmi
Those buying Centro Properties shares at 47c are taking an interesting punt. Clearly if the banks pulled the plug on Centro and appointed an administrator or receiver Centro shares would be worthless.

But it's becoming increasingly likely that pulling the Centro plug is not a practical option for the banks – at least while the Centro management continues to perform. Yesterday I explained how the appointment of an administrator would trigger the destruction of the Centro shopping centre management agreements, which are currently generating more than $200 million a year in revenue.

On reading my comments Professor Kevin Davis, director of the Melbourne Centre for Financial Studies, responded that there is another reason why the banks would not want to pull the plug on Centro.

Davis says that, as the banks are unsecured Centro Properties creditors, they will want to avoid putting Centro into receivership because they would then face lots of aggrieved shareholders who under the Sons of Gwalia decision would rank equally with them and dilute the banks' recoveries.

Under the Sons of Gwalia precedent, shareholders who are successful in bringing actions against Centro will rank as unsecured creditors. The are plenty of Centro actions in the pipeline.

If the banks want to maximize their return from Centro they now have two reasons not to appoint an administrator. There is no doubt that, in time, Centro will be reconstructed. But unless that reconstruction delivers real value to Centro shareholders its is not going to be approved. In turn that increases the likelihood and power of Sons of Gwalia style actions.

Unless a magical buyer for Centro emerges – which currently seems unlikely but not impossible – a Centro reconstruction will see the banks convert much of their unsecured loans to equity. Just what the terms of any Centro reconstruction will be, remains very speculative. But any Centro reconstruction may need to take into account a Sons of Gwalia claim as well as the value of the management contracts.

We are receiving disturbing reports about the slump in American retailing on the back of US lower house prices and a falling economy. Many retail stores will shut which means that selling Centro's American shopping centres will not be easy.

But Centro's small, food oriented centres are much less vulnerable than the large discretionary spending malls like those owned by Westfield. 

Once the market dust settles then these Centro shopping centres are perfect investments for superannuation funds – what's required is re-shaping the ownership vehicle. The sooner everyone focuses on that course of action the better. 



Source businessspectator.com.au


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## wilko66 (17 April 2008)

More of the same really but worth a read;

http://business.theage.com.au/centro-gets-six-months-reprieve/20080416-26m2.html


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## Ruprect (18 April 2008)

I might be just guessing, but it looks as if a major holder has been selling down, since late yesterday and into today. Will wait to see. I dont think that means a whole lot in the scheme of things - once they are all sold down, the traders should come back.

By all reports, there should be an extension to the loan until at least september. If that gets announced, day traders will probably go into another frenzy.


----------



## vida (18 April 2008)

An announcement about the extension is due by the end of April and I think it will be positive by all accounts.  It will be more decision making time as to whether to sell/hold as the volatility will persist. I doubt if SP will go any lower than today from hereon but one of course can never be sure. I am a longterm holder by all intents and purposes from now on but if the market makes an offer I cannot refuse then all things are possible. Good luck to all.



Ruprect said:


> I might be just guessing, but it looks as if a major holder has been selling down, since late yesterday and into today. Will wait to see. I dont think that means a whole lot in the scheme of things - once they are all sold down, the traders should come back.
> 
> By all reports, there should be an extension to the loan until at least september. If that gets announced, day traders will probably go into another frenzy.


----------



## Ruprect (18 April 2008)

yeah, i agree, it should be positive. I dont think anybody, the banks included want to lose any more on this one.

It looks quite clear now that somebody major is selling down, just offloaded a million in one hit at 42c. What is interesting though, is that there is strong support - buyers are still lining up at that price.

Once the major gets rid of their holding, we may just see another quick bounce. Then of course its a matter of picking an entry point!


----------



## propergeez (18 April 2008)

Ruprect said:


> I might be just guessing, but it looks as if a major holder has been selling down, since late yesterday and into today. Will wait to see. I dont think that means a whole lot in the scheme of things - once they are all sold down, the traders should come back.
> 
> By all reports, there should be an extension to the loan until at least september. If that gets announced, day traders will probably go into another frenzy.




Mmmmn, there have been so many articles on the banks giving Centro an extension until September that I would have thought that this news is already built into the price. From .23 to .42 is the price speculation of the news. I think it would take something extra to boost into the .6 range. 

Allco is on the right track, steady updates - moving to the realization of its assets and gradually liquidating them, they are giving almost daily updates. If Centro can do this then at least it would be a move in a positive direction.
And it would be good to see if the current management have made any moves in the last month, or are they still on a preventative fire sale mission?


----------



## snowblind (18 April 2008)

Could't agree more propergeez. Unfortunately I think the SP has allready factored the rumours and leaks in.


----------



## Trader52 (18 April 2008)

There is an article today in the WSJ of an interview with the CEO talking about progress to date, I think there will be coverage in tomorrows papers here in Oz.  No big news, but indications that extension is looking positive.


----------



## Ruprect (19 April 2008)

I agree, there is some factoring in of the predicted extension. But it isnt totally factored in. After all, the extension is still only a possibility. 

If it becomes reality, centro have another 6 months to find a solution. And that in itself is worthy of serious interest by the market.


----------



## Trojax (20 April 2008)

http://www.businessspectator.com.au
/bs.nsf/Article/WEEKEND-READ-Centro-in-the-balance-DTA8T?OpenDocument

'At the moment the Centro priority is to obtain a further extension of the moratorium to September 30 to line the Australian lenders and the US bondholders up with the US banks.

That would not only buy time but reduce the perceived leverage of the prospective buyers of the wholesale funds or the parties offering to inject equity into the headstock. An extension might flush out more attractive bids.

It is probably also the case that the size of the Centro portfolios depresses value in conditions where debt is hard to access and very expensive. That would probably be a particular problem for the Australian fund which, while full of high-quality properties, is about three times larger than the US fund. Selling the individual properties in the two wholesale portfolios might produce better outcomes but would take a lot more time.

It is possible that the banks might be prepared to contemplate something more sophisticated than a simple extension of the moratorium until September 30. A longer extension would allow for a far more orderly realisation of assets and potentially shift the recapitalisation phase beyond the nadir of the sub-prime crisis.

As Gottliebsen suggested, it might also be possible for the banks to either help stabilise and recapitalise Centro themselves, through a partial debt-for-equity swap or by trading a longer extension for some exposure to Centro’s upside.

With their interests and those of Centro’s equityholders crudely aligned, the best chance they have of getting their money back intact is to ensure that there is something meaningful left for the equityholders. For any of that to occur, however, it is imperative that Centro get past the April 30 deadline with its portfolios intact and its funding secured for at least another five months.'
--

As previously stated, I've always held this view, we'll see a buyer too after 30 April and before Sept, but not while short term deadlines are in place, the sept is a done deal imo, what then come end of this month for the SP?


----------



## Lucky_Country (21 April 2008)

Well I would like too think $1 sp on the granted extension which will slowly grow on the decline of the sub prime fiasco
They may even get too keep everything intact


----------



## Trader52 (21 April 2008)

I think $1 on the granting of an extension may be a bit high, though I would welcome it.  Perhaps 70c then building if the financial conditions improve in comming months.  Will also depend on how the Oz banks go during their reporting season in May.  If they are showing bigger then expected loses, buyers will still be cautious about CNP and the like.  A good reporting season and people may think that the banks are able to support CNP for the long term.  Given how ANZ has reacted to Opes and Lift, I don't think they are in a supportive mood!


----------



## Drubula (21 April 2008)

Good Point, if the banks are prepared to support CNP for the longterm and allow the company to reestablish itself financially there would be no reason why the share price in the longterm recovers beyond the $2.50 mark (What has changed since the stock sat at $10.00????). Cashflow is one of the biggest advantages for CNP, hence why banks are reluctant(maybe no choice at this stage)to withdraw support.

Hopefully an extension by the banks will allow CNP to take its first steps in restructure. Time will tell and heres hoping.


----------



## Lavender689 (21 April 2008)

Drubula said:


> Good Point, if the banks are prepared to support CNP for the longterm and allow the company to reestablish itself financially there would be no reason why the share price in the longterm recovers beyond the $2.50 mark (What has changed since the stock sat at $10.00????). Cashflow is one of the biggest advantages for CNP, hence why banks are reluctant(maybe no choice at this stage)to withdraw support.
> 
> Hopefully an extension by the banks will allow CNP to take its first steps in restructure. Time will tell and heres hoping.




Herald Sun article on CNP 

http://www.news.com.au/heraldsun/story/0,21985,23562571-664,00.html

nothing new really, but gives a better indication of time and likely content of the announcement. 

Cheers, Lavendar689


----------



## Lavender689 (21 April 2008)

Today's neutral announcement

21 April 2008
Companies Announcement Office
Australian Stock Exchange Limited
10th Floor, 20 Bond Street
Sydney NSW 2000
Dear Sir
In regards to the article on page 18 of the Australian Financial Review today, as previously
announced, Centro Properties Group (Centro) is in discussions with a number of parties and lender
groups in relation to the recapitalisation process. These discussions are continuing but remain
incomplete. At this time, there is no certainty or assurance that these discussions will lead to a
transaction, what form such transaction may take, or what value might arise out of a transaction, if
any.
There have been offers received for Centro’s interest in the Centro Australia Wholesale Fund
(CAWF). The Group has reviewed the offers and is reconsidering the marketing strategy for this
interest to achieve the most value. This may include selling the CAWF properties in smaller
portfolios and/or individually.
The Centro America Fund (CAF) process started later than the CAWF process and is ongoing with
offers currently being considered.
Discussions are also continuing with lenders on the extension of facilities beyond 30 April 2008.
The Board will make decisions on its options in the best interests of shareholders and at the
appropriate times and will inform the market accordingly.
Yours faithfully,
Elizabeth Hourigan
Company Secretary


----------



## Lavender689 (21 April 2008)

http://www.newsalerts.com.au/a.php?a=120473&code=CNP&source=ea7882f8a3e726b7d67e8425fedd3026

Centro says talks with lenders continue

April 21, 2008 03:54pm

SHOPPING centre operator Centro Properties Group says it is continuing to talk to a number of parties and lenders about its recapitalisation plans.

Centro reiterated in a letter to the stock exchange today that it had received offers for its interest in two of its related funds. 

It's currently considering offers for the Centro Australia Wholesale Fund and may consider selling the fund's properties individually or into smaller portfolios. 

It is still mulling its options in regard to the Centro America Fund. 

Discussions are also continuing with lenders on the extension of facilities beyond April 30. 

"These discussions are continuing but remain incomplete,'' Centro said. 

"At this time, there is no certainty or assurance that these discussions will lead to a transaction, what form such transaction may take, or what value might arise out of a transaction, if any.''


----------



## Trojax (21 April 2008)

CNP's releases are just covering their 'official line' due to privacy reasons on bids or extensions, even blind freddy's dog can see the extension will happen, sale of CAF or CAWF between now and the end of the month would be a great bonus but isn't going to change the scenario one bit for the Sept extension.

DYOR though, plenty of media reports citing it, the lenders have already shown their hand by extending twice, what's new to prevent them going to Sept to max sales returns in the interim or ride out the crunch, nothing I can see


----------



## vida (21 April 2008)

I am not a financial whiz but it seems obvious to me too that if the banks have not pulled the plug yet as they have too much to lose, they will extend further as it is in their interests to do so. They are covering their own asses and ours too in the process but theirs are much more massively bigger 



Trojax said:


> CNP's releases are just covering their 'official line' due to privacy reasons on bids or extensions, even blind freddy's dog can see the extension will happen, sale of CAF or CAWF between now and the end of the month would be a great bonus but isn't going to change the scenario one bit for the Sept extension.
> 
> DYOR though, plenty of media reports citing it, the lenders have already shown their hand by extending twice, what's new to prevent them going to Sept to max sales returns in the interim or ride out the crunch, nothing I can see


----------



## Fed23 (21 April 2008)

From what I have read is the banks are unsecure creditors, if they pull the plug they stand to lose everything. What makes it great is that in this case the banks are on the same level as shareholders, not like ANZ and opes.


----------



## metric (22 April 2008)

theres an ann out at cnp. commonwealth bank has relinquished some voting rights. about .68% or something. doesnt seem worth an ann. im not real good at reading that stuff though...


----------



## Lavender689 (23 April 2008)

Hi Guys and Gals,

What do you make of the CBA shareholding reduction in CNP announced yesterday?

Does anyone know why CER opened higher than CNP, relatively speaking?

Thanks, L


----------



## propergeez (23 April 2008)

So its crunch time one full day trading left before the announcement. I think that the Commonwealth sell off was minimal and the announcement was made  including up to the 17th of April. If you look at the volume made over the last week, its been pretty low comparing to the 100m volume per day seen in March. Volume has been around 12m to 25m per day. If Commonwealth were selling off their other 80M I believe the volumes would be higher. As for CER and CNP, CER already has agreements in place for extension to September, CNP doesn't. However trading on these stocks seem to be partnered, CNP comes up with good news CER also goes up and vice versa. CER is less volatile though with an all time high and low of $2 to .31 whereas CNP is $10 to .23. Good Luck


----------



## Trojax (23 April 2008)

propergeez said:


> So its crunch time one full day trading left before the announcement.




 extension is to 30th April, to me the ann's will be up to weds next week. Why you think tom?


----------



## metric (24 April 2008)

centro must announce a deal to the market as soon as it has been finalised. so there could be an ann at anytime before or including the 30th april.


----------



## metric (24 April 2008)

there are 4 put options on the cnp course of sales for today, for a total of 120k.

is a put option simmilar to shorting? ie; believing the stock will fall in price?


----------



## jaeyon (24 April 2008)

metric said:


> there are 4 put options on the cnp course of sales for today, for a total of 120k.
> 
> is a put option simmilar to shorting? ie; believing the stock will fall in price?



a put option is an option to sell a stock at maturity for a predetermined price (the exercise price).

so to answer your question i believe so.


----------



## oldblue (24 April 2008)

jaeyon said:


> a put option is an option to sell a stock at maturity for a predetermined price (the exercise price).
> 
> so to answer your question i believe so.




The big difference is, of course, that the put option is only an option to sell (which may or may not be exercised) whereas a short sale is a definite transaction.


----------



## moneymajix (24 April 2008)

*Re: CNP -*

Increase in volume over lunchtime and sp. increase of nearly 10% (47.5c).

Traders or expectation of debt extension?

Let's see if the interest in CNP continues this afternoon.

CNP is number 2 in the Top 20 of ASX 100 Stocks.
http://markets.theage.com.au/apps/mkt/movers.ac

.


----------



## ian2382000 (24 April 2008)

So looks like could be some good news coming up as definitely going the opposite to the general market.


----------



## tulasi74 (24 April 2008)

I have just joined the forum but I have been following Centro since it crashed last December.  There was an earlier post that asked what has changed since the stock was trading at $10.00.  I had a quick look at their last financial report for 6 months ending 30 December 2007 when they reported a 1.1 billion loss.  The scary thing was that asset write downs only totalled 1.05 billion which means Centro potentially made a loss of 50 million for the 6 months.  They state that net tangible assets per share is $1.35 (total assets (less intangibles) - liabilities divided by number of shares on issue) but if their asset values go down then there is no net tangible assets for share holders. However, the net tangible asset is after they already wrote down 1billion so hopefully there will not be much more writedowns required. There has been reports on AFR that stating that Centro may have paid 70% too much for the New Plan Realty acquisition which really questions what the true value of their assets are. If the cost of their debt exceeds their revenues they are not a profitable entity either. Thankfully its not in the best interest of banks to pull the rug from under Centro so hopefully the extension will be granted.  The other thing to watch out for is cost of litigation.  It wont take much for Centro to go from a profitable entity to an insolvent one. Sorry to post such a negative post but this is the reality facing Centro shareholders.


----------



## sonicwind (25 April 2008)

I believe these losses were mainly paper losses as i haven't heard of any asset sales or any collapse of Centro owned entities? Otherwise how could Centro have reported 19c dividend per share, not paid out only because of the current credit crisis not because of the company's future profit outlook. So I would disagree with the statement "it wont take much for centro to go from profitable to insolvent"

Has anyone examined the financial report in detail? please correct me if I am wrong.


----------



## Lavender689 (25 April 2008)

I would agree with you on that.   It is mostly non-cash write-downs as per A-IFRS, and may include some negative Mark-to-Market for some derivatives.  
On a operating cash flow basis, the business is still sound with good servicing capacity for interest.  It is just relatively highly geared which would have been allowed before the credit crunch.  

As long as the banks agree to refinance, which mostly likely will be in this case, the company will remain solvent.  I have no doubt about that.  When the US economy recovers, and the US property prices reverse their current down trend, they will not record less non-cash writedowns.   It is good for them tax wise, as long as they are not forced to sell such properties in the short term. 

I am pretty optimistic about that.

At this stage, it is a matter of what margin they pay for the refinancing, and what they can reasonably do with regard to sale of some retail properties.

Apparently, under the current environment, equity firms or other institutions are not encouraged to buy the whole or a large chunk of the business due to funding constraints, especially in this market where the bench mark interest rate is high and there is not much AUD liquidity.   Even Wesfarmers will have to fund in the US bond market at US Treasury +425bps, which is not economical compared to equity raising. 

I have a gut feel that the new CEO is pretty experienced and decisive, and a very wise man!  He will work out the best solution for the shareholders, and the situations allows him to do so given the banks' tied interest and the fundamentally sound nature of the business. 

Good luck to everyone that holds CNP.   Good time is coming soon!

Cheers, L


----------



## Trojax (27 April 2008)

Ugh done to death the last few months, lets see what happens re potential extension Mon\Tues, banks cant afford to lose, to walk away now is total writedown suicide in an already smashed SP.

That said I'm cashed n ready, holding significant cnp for an upside and seperately a big bag of coin in case they do make that monumental mistake so I can take advantage of the carnage they will receive if close shop. I don't honestly believe it will happen.

We're going to Sept 30 IMO, DYOR though, volatile big time!


----------



## Lavender689 (28 April 2008)

This morning at 7:05am there were a total of 200,000 (5 trades) options excersised at 1.2/share.  Not sure whether it was put option or  call option.

Does anyone have any idea?

Thanks,
L


----------



## Lavender689 (28 April 2008)

Just checked all the cnp options there are only two at exercise price of 1.2/share, CNPB7 and CNPB8, one is call option and the other is put option both expiring May 29, 2008. 

Hopefully it is the call option that has been exercised.  But it is more likely to be the put option exercised. 

Cheers, L


----------



## Lavender689 (28 April 2008)

Will there be a trading halt request before the forthcoming announcement re the extension? What are the ASX rules for a trading halt/major announcement?

Thanks, L


----------



## jaeyon (28 April 2008)

Lavender689 said:


> Will there be a trading halt request before the forthcoming announcement re the extension? What are the ASX rules for a trading halt/major announcement?
> 
> Thanks, L




yes there should be a trading halt. trading halts are called for all announcements which may be market sensitive.


----------



## Lavender689 (28 April 2008)

Today's Business Spectator article on CNP

http://www.businessspectator.com.au/bs.nsf/Article/Sizing-up-Centro-E4AEH?OpenDocument


----------



## Lavender689 (28 April 2008)

Extension highly likely, but announcement will be no earlier than Wed. 
See the article below.

1:56 PM Apr 28, 2008   Centro seeks bids for 25 malls
TOP News
Centro seeks bids for 25 malls 1:56 PM 

The Spectators

Reuters
Debt-laden Centro Properties Group said it is seeking bids for 25 of its shopping centres, but hopes to retain at least 50 per cent ownership in them to retain management and leasing control.

The group, which borrowed heavily last year to fund a rapid US expansion, must refinance $5.4 billion of debt by Wednesday. It is under pressure to sell assets to raise cash after being caught in the global credit crunch.

Centro, owner of 700 US malls, said refinancing talks were continuing and there would be no update to the market prior to Wednesday's deadline. Banks are expected to grant a five-month extension.

"I imagine it would be Wednesday before we say anything. These things tend to go to the last minute," said Centro spokesman Mitchell Brown.

"We're still working towards it. The banks are still supportive, it just takes a while to get the documentation done," he said.

About two-thirds of Centro's shopping centres are in the United States, with the remainder in Australia and New Zealand. It holds the assets through a complex network of managed funds.

The company is selling part of its Centro Australia Wholesale Fund, which contains 28 shopping centres, 25 of which are wholly owned. Brown said buyers had expressed interest in smaller chunks but Centro hoped to avoid selling off individual centres.

"That's possible but it's not what we're pursuing as the primary objective. You may see a few here or there but we'd prefer not to," Brown said.

"Let's say you put four centres together and someone wanted to take a 50 per cent interest in those four centres -- that's the kind of thing that would be ideal in our mind because we'd still then be managing, and marketing and leasing the shopping centres," he said.

The group has previously said its adviser, Lazard Carnegie Wylie, reported extensive interest from potential investors and it expected a number of parties to start due diligence soon. The Sydney Morning Herald on Monday listed potential buyers as GPT Group, Stockland, Westfield Group, Mirvac Group and CFS Retail Property Trust, although they may face competition issues.

Industry Superannuation Property Trust, family groups and individual property investors may also be interested, the newspaper said.

"(Equity) interest in some or all of those assets is very likely to be sold. Twenty-five of them are not in joint ventures with external partners so there are 25 that are able to be sold pretty quickly," Brown said.

Centro plans to review indicative bids and then grant access to detailed due diligence. Formal documents had not yet been signed.

Centro shares were up 2.3 per cent at 45 cents at 0345 GMT in a broader market up 0.5 percent. The shares had traded above $10 last May.

Centro recently rejected offers to buy stakes in the company reported by newspapers to be up to around $0.90 a share.

"We have received a number of offers. The board has not taken any of those. We're not going to do anything that takes too big a discount for shareholders," Mr Brown said.


----------



## hartley (28 April 2008)

Well i'm bullish so the two things I took from that article were:

"We're still working towards it. The banks are still supportive, it just takes a while to get the documentation done," he said.

"We have received a number of offers. The board has not taken any of those. We're not going to do anything that takes too big a discount for shareholders," Mr Brown said.

Now I realise that neither article is particularly substantial, but the first seems to indicate it's just formalities now at least Sept30 is in the bag. Sounds good to me.


----------



## tulasi74 (28 April 2008)

Thanks Lavender for putting those articles up.  

Makes me more bullish than I was after reading the article in smh which said that another orgn was funding litigation action for shareholders and Macquarie Equities have valued the stock between 0c and 50c


----------



## Lavender689 (28 April 2008)

I just got the time these days.  Other than the AFR, SMH, the age websites, the following are worth checking from time to time as well.

1. www.newsalerts.com.au
2. www.news.com.au
3. businessspectator.com.au (constantly write articles about CNP). 
4. ComSec chat room: http://chat.comsec.com.au/Search.asp
(sometimes people in other online forums get the news first. )
5. www.money.ninemsn.com.au

Let's all keep an eye on the latest news on CNP and keep each other posted in time.  

If anyone knows other good info sources, pls kindly share with the rest of us.

We shall all benefit from it in a better way, a concerted way. 

Cheers,
L


----------



## ian2382000 (29 April 2008)

It's good to see that they did the full syndicate distribution as they are making excellent returns for the investors and shows that cashflow is not an issue. This should shut up a few of the doubters


----------



## Lavender689 (29 April 2008)

Here is the article for those that haven't read it.

Most Centro syndicates meet forecast payouts
Source - The Australian Financial Review

TOP News
Local market receives mixed leads 7:53 AM 
Wall Street ends flat 6:40 AM 
Campbell to sell local snack business 8:34 AM 
ANZ gets Takeovers Panel reprieve 12:55 AM 
Big names nabbed in tax probe: AFP 2:07 AM 

The Spectators
SCOREBOARD: Big fish
Kohler: The naked shorting myth
Gottliebsen: Thinking outside the box
Bartholomeusz: Remuneration re-examined
This is going to hurt




There is some good news for investors in Centro Properties Group. On 28 April 2008, Centro said that almost all investors in Centro Properties' managed syndicates will receive their full forecast distributions for the March 2008 quarter. Centro's syndicates have $A8.5 billion in assets under management and some 16,500 retail investors. It is expected that Centro's Australian lenders will soon announce that they will give the group another extension of finances until September 2008. Gerard Condon, of Centro, said that the underlying property assets are performing solidly and provide strong returns to investors


Distributed by News Bites.  © Lexis-Nexis


----------



## Lavender689 (30 April 2008)

news from SMH.

7:21 AM Apr 30, 2008   Banks throw Centro lifeline to recoup debt
Source - The Sydney Morning Herald

There is an expectation that Centro Properties' bankers will confirm a five-month extension, allowing the troubled company more time to repay $A4.9 billion in debt. Two private groups are said to be in negotiations with Centro for the sale of three shopping centres, news which rallied investor confidence and resulted in a $A0.025 rise in the share price to $A0.475 on 29 April 2008. A Centro spokesperson confirmed that individual asset sales were an aspect of the company's debt refinancing plan


Distributed by News Bites.  © Lexis-Nexis


----------



## nioka (30 April 2008)

According to todays quote Centro in in preopen. Looks like we will soon know the fate of investments in CNP.
 Trading halt pending an announcement


----------



## Lavender689 (30 April 2008)

CNP and cER are both in trading halt until the earlier of the release of announcement or commencement of normal trading on May 2, 2008 (Friday).

Cheers, L


----------



## Fed23 (30 April 2008)

If im not wrong but the Sky Business channel this morning said that Centro had been given an extra 5months to refinance


----------



## propergeez (30 April 2008)

This is turning into the longest wait ever. I really hope they are compiling a a strong strategy report for the coming 5 months as part the bank extension confirmation (hopefully). Another wish is that they will give an indication of the offers that they have had for the company as a whole, confirmation of the refusal of the 90c offer reported widely in the media would give the share price a big boost. Awaiting - not very patiently.


----------



## hsv2001 (30 April 2008)

Centro have announced another minor extension of 7 days for further discussion on a longer term extension. 

We had to wait all day to hear this...


----------



## propergeez (30 April 2008)

A quick couple of questions. Will CNP be suspended for the next 7 days? Or will it be open to trade?


----------



## hsv2001 (30 April 2008)

I'm pretty sure it will be open for trade within minutes, it is in PRE_NR stage atm, not TRADING_HALT which usually means it will be open after the ann has been listed and time has been given to read the ann.

Marc


----------



## nioka (30 April 2008)

hsv2001 said:


> Centro have announced another minor extension of 7 days for further discussion on a longer term extension.
> 
> We had to wait all day to hear this...




 I wonder if we will have to wait for the 7 days for the lifting of the trading halt. The announcement said to Friday or when the announcement was made.It is still in preopen at the moment. The punters seem to look for a good result. I had a sell order in for 60c with my place in the queue yesterday  in the 500s it has fallen to the low 300s today. This is an indication that selling pressure is falling.


----------



## propergeez (30 April 2008)

Now all it will take for a major sell off in the next 5 days is a news article stating that the banks aren't happy with Centro's restructuring plans. I expect The Age/ SMH to be busy typing it up now. If that happens (again!) expect the share price to go to the 0.3's.


----------



## brontemc (30 April 2008)

> a seven day interim extension on all facilities expiring today in order to allow time for the finalisation of discussions with all financiers and the completion of documentation for a longer term extension.




From that its pretty obvious that there is an extension, it just has to be signed and sealed. I wouldn't expect any big sell outs through the week.. probably more people will jump on board I would have thought?


----------



## Lavender689 (30 April 2008)

My reading of the announcement is that the interim 7 days is for them to finalise final negotiations and documentation. 

From my work experience, this is what banks would normally do when there is time constraints, i.e. a short period temporary extension, which can generally be more easily approved by the Credit Approval authority; thus allowing enough time for the final documentation.  In this case, given the number  of banks involved and different jurisdications, it takes much longer than a single-lender transaction or a transaction involving just local banks.   I see a lot of surety for longer term extension from this interim extension.

Let's hope my view proves to be correct. 
Cheers, L


----------



## Dezza (30 April 2008)

I like the "longer term" extension...early predictions was for 5 months, but perhaps 12 months would be nice.


----------



## Trojax (30 April 2008)

Lavender689 said:


> Centro, owner of 700 US malls, said refinancing talks were continuing and there would be no update to the market prior to Wednesday's deadline. *Banks are expected to grant a five-month extension.*
> 
> "I imagine it would be Wednesday before we say anything. *These things tend to go to the last minute*," said Centro spokesman Mitchell Brown.
> 
> ...




Edited out the journo fluff (see original post for full article)

To be honest, I'm surprised at the 7 day extension over a Sept extension.. it's not like all parties haven't known for months and been able to prepare well in advance, only thing I can think is some potential buyers of centers\equity's are dragging their heels haggling still prior to to main refinance which would affect the overall figure to be extended.


----------



## VViCKiD (30 April 2008)

So assuming that CNP manages to sell off assets its assets to refinance debt, what are the possible outcomes ?


----------



## Lavender689 (30 April 2008)

Potential extension to Dec.31, 2008 - makes perfect sense given the situation

Centro has time to burn
TOP News
Origin Energy gets $13bn BG Group bid 10:00 PM 
Local stocks end flat 4:45 PM 
Centro gets 7-day loan extension 5:08 PM 
GM posts quarterly loss on strike, charges 10:05 PM 
P&G quarterly profit rises 10:17 PM 

The Spectators
Gottliebsen: Rio Tinto's reservations revealed
Will the Fed broaden its focus?
Bartholomeusz: Centro has time to burn
Kohler: A satisfying bid
Keep your head down

The seven-day extension granted to Centro Properties by its lenders may create the impression of brinkmanship but one of the issues that caused it is apparently an argument between the banks about how generous to be to the struggling group. 

Today was supposed to be a deadline imposed by Centro’s Australian bankers and its US bondholders for the group to come up with a satisfactory plan to recapitalise itself. Over time, however, it actually became a deadline for the banks to agree to an extension of the current moratorium on repayment of $4 billion of debt until September 30. The consequences for the banks of not extending would be unpalatable. 

Centro’s US bankers had already agreed to give it until the end of September to come up with a plan, conditional on the other lenders also approving that extension. 

As it happened, all the local lenders are said to have agreed to a September deadline. In fact, most of them apparently wanted to go further and give Centro and its new chief executive Glenn Rufrano until December 31 to come up with an acceptable response to Centro’s distressed circumstances. One bank, however, apparently came up with a number of last-minute requests in relation to documentation that forced the one week extension. 

The fact that the local banks are even contemplating a new deadline beyond September is significant because it indicates that they now fully appreciate their own plight. 

The impact of the extra time would probably have been equally symbolic as real. It would have told the “vultures” circling Centro to extract some of its better assets that the banks were going to do what they could to ensure there were no distressed sales. 

The banks know that they can’t put Centro into either a formal or informal administration and force it to start liquidating its assets. A formal administration would destroy the value of their loans by wiping out the value of Centro’s service businesses and Centro shareholders would never agree to a forced sales program that left them nothing of any substance. 

In any event, the Centro camp appears confident that it will be given at least until September 30 and perhaps longer to come up with a plan that is acceptable to its lenders and preserves something meaningful for its equityholders. 

Time is valuable. With the cost of debt rising, property markets softening, the US economy sliding towards recession and the Australian economy likely to slow, it isn’t a good moment for a large-scale asset sale program to be driven by short-term deadlines. 

Pushing the deadline back to December would improve Centro’s negotiating position with prospective buyers of its assets and/or suppliers of equity. 

If prospective buyers of Centro’s most valuable assets are convinced, or at least concerned, that the banks will continue to extend rather than force the group to dump assets, the Centro team will have some leverage with which to try to negotiate deals that reflect the longer term strategic value of some of its retail centres. 

It might be counter-intuitive, but the more time the banks give Centro the less time it might actually need to start reducing its mountain of debt.


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## sonicwind (30 April 2008)

Thanks Lavender for searching and sharing these various articles with us.

Historically CNP's SP has always been much higher than CER's, so naturally at similar prices CNP should be regarded as the "bigger bargain". I think the narrowing gap of the two's SP we saw over the last few months can only be explained by people's perceived uncertainty. When the future becomes more cloudy, SP favours CER, and vice versa. This was demonstrated by the PPI drama in March.

So based on CER's current SP, and assume Centro does get the bank's extension, and that no further bad news comes out, I am pretty confident CNP will edge ahead of CER and stay above 50c in May.


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## Lavender689 (1 May 2008)

There has been report from other media (AFR/SMH/the age) re one bank's refusal to extend their loan as their exposure is secured.  Has anyone seen that?   I reckon , as long as they are the minority amongst the banks, they could either be voted out/refinanced at par by the other lenders.  It should not overturn the direction for 5 -month or longer extension.

Also, there has been some fuss created by IMF re litigation funding.  I reckon it is not going to cause a major stir given the scheme of things happening here.  

If anyone sees such articles, pls kindly share the info with the rest of us.

Thanks, L


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## Lavender689 (1 May 2008)

Below is what was posted in another forum.

Lateline made mention that the Sept or possibly Dec extension of debt was delayed due to one institution believing they have secured loans against Centro properties and where not totally behind the extension and would prefer a 'fire sale' to take place.

Did anyone else listen to the report? Sure, I heard right!


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## Lavender689 (1 May 2008)

Good News re unlisted centro syndicate funding extension from its website.

BTW, I rang the investor enquiry number (1800802400) this afternoon, and was advised that the "final negotiations" mentioned in yesterday's ASX announcement refers to the financing extension  only. It does not refer to the negotiations re the sale of assets.  

This adds more certainty to the extension of Centro's financing. 

I also queried about media report that a German bank is holding back the extension process, the lady on the other side said she can not comment on that. 

You guys can also call the free number above to seek clarifications. 

Cheers, L


"Centro MCS Announces Agreement to Refinance Expiring Debt
Centro MCS today announced that the existing financiers to the eight syndicates with debt
expiring 30 April 2008 have agreed to refinance the debt for a two year term maturing April
2010. This new facility is currently being documented and a short term (seven day
extension) has been agreed in order to finalise the necessary documentation.
The eight syndicates involved are Centro MCS 2, 3, 4, 5, 6, 8, 11 & 12.
Centro MCS Solid Track Record
Centro MCS has an excellent track record in managing syndicates, with 36 syndicates
valued at $8.5 billion currently under management on behalf of approximately 16,500
investors. Since inception Centro MCS syndicates have averaged a total return of 17% per
annum. For more information, visit centromcs.com.au.
For further information
Media: Investors:
Mitchell Brown Centro Investor Services
Corporate Marketing Manager In Australia: 1800 802 400
+61 3 8847 1890 International: +61 3 8847 1802
mitchell.brown@centro.com.au From New Zealand: 0061 3 8847 1802
investor@centro.com.au


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## MangaNOID (1 May 2008)

Lavender689 said:


> financiers to the eight syndicates with debt
> expiring 30 April 2008 have agreed to refinance the debt for a two year term maturing April
> 2010. This new facility is currently being documented and a short term (seven day
> extension) has been agreed in order to finalise the necessary documentation.




ummm.... 2 year extension and not 5 months! why wasnt this announced on the asx? i guess cause its not finalised?


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## metric (1 May 2008)

there is a new, price sensitive ann on the asx. much, much better ann. alls cool except 200 mil. pocket change.


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## mapna (1 May 2008)

Lavender689 said:


> Below is what was posted in another forum.
> 
> Lateline made mention that the Sept or possibly Dec extension of debt was delayed due to one institution believing they have secured loans against Centro properties and where not totally behind the extension and would prefer a 'fire sale' to take place.
> 
> Did anyone else listen to the report? Sure, I heard right!




I remember to read an article on the day that CNP got extension for 7days. because one of the banks requested more documentation.  Sorry I cant find that article now ....

http://www.forbes.com/afxnewslimited/feeds/afx/2008/04/30/afx4950189.html

"It said the interim extension would allow time for the finalization of discussions with all financiers and the completion of documentation for a longer term extension."

I have not read or heard anything mentioned about "a bank prefer a 'fire sale'.

Once again - this is my personal info only - DYOR.


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## propergeez (1 May 2008)

Lavender689 said:


> Good News re unlisted centro syndicate funding extension from its website.
> 
> BTW, I rang the investor enquiry number (1800802400) this afternoon, and was advised that the "final negotiations" mentioned in yesterday's ASX announcement refers to the financing extension  only. It does not refer to the negotiations re the sale of assets.
> 
> ...





Just a quick note to make it clear (as there has been a post above exclaiming the 2 year extension) Centro MCS is an UNLISTED fund i.e. not part of CNP nor CER, it has 0.5B of debt of which 331M is being extended to to April 2010. CNP's debt of 2.75B is still being worked on hence the 7th of May cut off. I agree that the Centro MCS's news is a good indication of things to come and I like your work and tenacity Lavender689. Just wanted to make it clear to everyone that the 2 year refinance is not for every part of Centro (of which there are many) just for the unlisted MCS fund.


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## Lavender689 (1 May 2008)

Thanks for that. 

I have actually marked at the top that it is unlisted syndicate. Otherwise, I should have put it in a different way.  It is probably a bit vague. But if anyone reads the whole posting, they should know what I was saying there.

Thanks for your clarification, anyway.

Cheers, L


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## Lavender689 (1 May 2008)

I reckon the only bank that refused the extension, with amount of probably around AUD150mln (as seen from the announcement) can either (1) be refinanced on a pro-rata basis by the remaining lenders; or (2). via a further short-term extension that allows CNP time to raise fund (not necessarily from asset sale) to repay them.  It is minor amount in the whole scheme  of things anyway.  This is a very reassuring update.  The market should react very positively tomorrow.


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## mapna (3 May 2008)

The lastest ann. from CNP re-assure the extension of the debts but the market did not cheer up that much on Friday. Up, down then up again but with cautous .... wonder what else bothers the ppl. ???? imo


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## vida (3 May 2008)

The latest announcement gives confidence as to longer extensions but they are not confirmed and in place yet for all debt issues, and sales of certain assets are proposed but no details outlined. There is positive optimism, promise and assurances but nothing yet is signed sealed and delivered and only once this is all in place I guess the SP will move more but considering all the factors the SP is doing well from recent lows of 23 cents ... going in right direction. We don't like it anyway when it soars, doubles/triples in a few hours as then it will fall heavily in as short a time., slow and sure rising is better than a big spike although this can occur soon too. That is how i see it for now at least and we can only wait & see / next week will be very interesting. As well its intriguing CER is going even better



mapna said:


> The lastest ann. from CNP re-assure the extension of the debts but the market did not cheer up that much on Friday. Up, down then up again but with cautous .... wonder what else bothers the ppl. ???? imo


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## tulasi74 (3 May 2008)

Back page of the Weekend Fin Review has an article on the debt extension.  It infers that the planned extension may have been for 12 months.  That might still happen but for the one bank that is holding out. The article also raises another good point about other smaller banks needing to be appeased if one small bank gets its own way and recovers their 178 million. Apparently there may be smaller banks in the US with small exposure. Am hoping it all gets sorted by next Wednesday but have a feeling it might be extended again. I agree with the earlier comment that price will be highly volatile...day traders heaven but its going to be great.


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## propergeez (5 May 2008)

It will be interesting to see what happens tomorrow, there were a lot of buyers in the morning session but in the afternoon they had gone. On all the platforms that I use (Sonray, Saxo and CMC), selling numbers are outweighing buying numbers on a 3-1 basis on the twenty .00X price points available. I have not seen that on CNP for a long while. By the look of it there are some real nerves running through the market concerning CNP.


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## Lavender689 (5 May 2008)

It may be:

(1). there is still a twist re the  extension;
(2). Major players in day-trading trying to lower the price to do another run;
(I presume there aren't many institutional players trading CNP at this stage)
(3). Dow futures is -37 points at present, though SPI200 is +46. 

Last Friday, after the early run to 0.505, CNP dwindled down all the way till near the close of trade on the day and surged again to 0.495 at close.   There appeared to be no news. 

I reckon it is more likely to be day trader lowering price to do another run.

My personal opinion only.
Cheers, L


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## tulasi74 (5 May 2008)

Is selling numbers outweighing bids on a 3:1 basis really that important?  CNP closing price today was unchanged but volume weighted average price is still on the way up.  Public holiday in QLD saw lower volumes across the board but CNP still maintained reasonable volume.  Can much faith be put on the sell bids that are in place?  I agree that it does not appear that large institutions have entered the market but they are probably being prudent and waiting for the confirmation before wading in.  There was a substantial shareholding notice a while ago that had JP Morgan as a net acquirer of 34 million shares and have not seen anything to suggest they have reduced their holding. I would doubt very much that one small bank could upset all Centro's plans especially as financial review reported that banks are also willing to provide funding for working capital.  I think the news will be positive on Wed or whenever it is confirmed but whether the institutions will wade back in is another issue.


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## propergeez (5 May 2008)

Lavender689 said:


> It may be:
> 
> (1). there is still a twist re the  extension;
> (2). Major players in day-trading trying to lower the price to do another run;
> ...




For me the run on Friday and Monday morning was from
1. the MCS news on Centro's website and subsequent press articles
2. it was also the first time that the Centro group has quantified its debt amount in an announcement and said positive things about the (hopeful) debt extension - ie the Thursday after close - CNP: Centro Interim Financing Extension Update. 



tulasi74 said:


> Is selling numbers outweighing bids on a 3:1 basis really that important?  CNP closing price today was unchanged but volume weighted average price is still on the way up.  Public holiday in QLD saw lower volumes across the board but CNP still maintained reasonable volume.  Can much faith be put on the sell bids that are in place?  I agree that it does not appear that large institutions have entered the market but they are probably being prudent and waiting for the confirmation before wading in.  There was a substantial shareholding notice a while ago that had JP Morgan as a net acquirer of 34 million shares and have not seen anything to suggest they have reduced their holding. I would doubt very much that one small bank could upset all Centro's plans especially as financial review reported that banks are also willing to provide funding for working capital.  I think the news will be positive on Wed or whenever it is confirmed but whether the institutions will wade back in is another issue.




There was no buying support in the afternoon session thats why there was a .53 to .495 swing at close, there was no support and it even slipped to .49 at one point. Looking at the no. of buyers in the afternoon session is making me a little nervous for tomorrow. Yes it does matter how many buyers there are in quantity, if the buyers aren't supporting the price then the sellers will sell at a cheaper price. Thus the share price goes down.


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## Rocket man (5 May 2008)

many holders are in for the 'long haul' and will wait for news over coming weeks in hope of good apprecation of share price 

many others would have decided to take their 10-20% profit after buying in last week in early 40s or even lower earlier on. Thats what we saw today IMO .. just some profit taking


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## nioka (5 May 2008)

According to a news article today there were a lot of CNP staff who were encouraged to take out large margin loans in their companies stock. Some have had to sell residential properties to mee those calls They evidently had a lot of stock. Maybe some of this is still circulating in the market or being introduced into the market. There will certainly be some sellers selling to get a tax advantage and probably buying back in.

There certainly has been volume traded and it is not just the price that fluctuates. I have a sell order in for 60c. I have been anywhere between 223 and 400+ in the queue at different stages during the day today. That is a lot of coming and going sellers which is not normally the case where the price has remained in a narrow margin during the same time.


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## tulasi74 (6 May 2008)

There are a couple of articles in the Fin Review and suggests tha the debt extension might be under threat because of the one small bank.


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## propergeez (6 May 2008)

Low volume day (9m - 10am to 3.30pm and then 6.5m in the last half hour) which is hardly surprising considering the possible outcomes of tomorrow. I was glad there wasn't too many nerves from the sellers - a 2.5c loss is not bad considering everyone is waiting for survival or bust news. Also glad that I sold out at .51 yesterday and went back in at .475 today, (well today I am glad, tomorrow could be a whole different story;-)


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## Lavender689 (7 May 2008)

SMH article re the twist in extension 
(it sort of echoes my previous analysis that the other banks may refinance West LB out, and allow themsellves time to recoup debt.)  However, I reckon given CNP's current circumstance,  it is more likely that for the AUD200mln, there will be only an interim extension, with the amount to be repaid from asset sale agreed by the lenders.  

I reckon, it is only a small twist in the extension, it may well be that the rest of the loans (for Australian at least) could be extended till Dec. 2008.  As it makes perfect sense to give CNP more time to potentially achieve better sale price (1). as the property price slowly recovers,
(2) the credit crunch eases;
(3). prevent massive discount as the buyers try to take advantage of CNP's current circumstance. 
(4). in line with (2). it will be easier for potential buyers to raise fund for the purchase.


Carolyn Cummins 
May 7, 2008 

THE beleaguered Centro Properties Group has until later today to fend off administrators and strike a deal with its bankers to extend its $4.2 billion debt deadline for the fourth and - the market hopes - last time.

Last night Centro's chief executive, Glenn Rufrano, was in discussions with all bankers on a deal to help his business survive. They are expected to continue today.

St George, which has a fully secured loan of $458 million to Centro, confirmed yesterday that it had not made any provision for possible losses, as it remained confident the deadline would be extended, allowing Centro to work its way out of its mountain of debt.

Centro's financiers and management were still trying to find a solution to the obstacle created by troubles at the German bank WestLB, which has prompted it to hold out on an agreement to extend Centro's debt deadline.

One solution could involve some interim loans being extended from the rest of the Centro banking syndicate.

One retail manager said yesterday that it was a case of whether Centro's primary lenders in Australia, including ANZ Bank, Commonwealth Bank, NAB and JP Morgan, were prepared to help out the German bank or risk losing a combined $4.2 billion now and even more by the end of the year.

This will be the fourth extension of debt repayments granted to Centro since it hit the wall in late December. Its troubles were due to its over-ambitious expansion plans in the US just as the credit crisis was gathering steam.

Since that time its market value has plummeted from $6.3 billion to $397.2 million at the close of trade yesterday.

Mr Rufrano was given an extension until today to get all the banks to approve his refinancing program, which includes asset sales in Australia and the US, and even an equity injection through a takeover of the whole enterprise.

"From what we hear, Centro's directors remain reluctant to offer potential buyers its better assets as the banks want them kept on the balance sheet as collateral," a source said.

"So it's a Catch-22. Other retail owners, such as Stockland, CFS Retail and GPT, among others, have been taking a good look at these assets, but Centro management only seem to be testing the market to determine a value for the properties and not offering up any sales."

Meanwhile, Goodman Group has raised about $260 million through the sale of its British services arm, Goodman Property Investors, and GPI managed funds to Aberdeen Asset Management. It included £12.5 million ($26 million) in performance-based payments over the next two years.

Analysts said the sale was expected and the price would be positive for other groups, such as Valad that operate similar businesses in Britain.


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## nioka (7 May 2008)

Normally CNP would look like the best buy ever. The balance sheet shows a share holders equity of $3.5 billion and a market cap of only $397 million. It has a PE ratio of 0.8. The banks should be fighting one another to LEND money to the company.


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## sting (7 May 2008)

Make or break time... TRADING HALT.....

Lets hope we dont have to wait until friday, my heart couldnt stand the strain.

Sach has pulled out of CER lets hope it isnt an omen. Fundamentally I still believe this mob are a sound ongoing concern, but pity like all market prices hearts, panic and underhanded manipulation rule over good business sense.

SEMPER UBI SUB UBI


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## Lavender689 (7 May 2008)

Trading halt until the earlier of the commencement of trade on Friday or the release of the announcement.

I reckon they are just trying to get the local banks' approval to share the WestLB loan on a pro-rata basis, and for a period that is likely to be till Sept 30, 2008 or earlier, pending sale of certain assets to repay the loan.


From a lending prospective and especially in today's environment, despite the strong cash flow of CNP, banks tend to be more conservative in their approach. What is important for a credit person is that they don't lend more than their fair share/offer better terms to the borrower than other lenders, this is especially true under the current environment.  

The fact is that banks don't increase their exposure to a troubled company unless they have to, eg. tide the borrower over temporary difficulty when the prospects are good, like in this case with CNP.


I think, they knew that West LB is not going to extend even after the EU rescue probably yesterday or the day before, and they are just trying to finalise the allocation of loan amongst the local banks and get their credit's approval.


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## nioka (7 May 2008)

sting said:


> Make or break time... TRADING HALT.....
> 
> Lets hope we dont have to wait until friday, my heart couldnt stand the strain.
> SEMPER UBI SUB UBI




I doubt if we will have to wait until friday. I would suggest the announcement will be made some time today and the trading halt is to give investors a chance to think about their current buy and sell orders. One way or another I'm expecting a bank decision this time.


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## Lavender689 (7 May 2008)

One important lesson I learned from the recent share price movements of CNP is that, it is generally right to believe that there are leakages of insider information to the market, especially when more traders are individuals rather than institutional investors (i.e. the price and volume swings are not going to be that apparent.)

The notion that "the market is right" has a lot of relevance here.  
I should have sensed that earlier - on Friday's afternoon trading session especially 3:30-4:10pm when the price slipped quickly all of a sudden.

Anyway, it is a learning process for me. 

Cheers,
L


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## tulasi74 (7 May 2008)

I agree there are leakages.  Monday morning trading thought was high volume and above the 50 cent mark.  

I just noticed that around 500k shares were removed from the bid volume.  The signs are not good.  Hope they don't take too long to make an announcement.


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## propergeez (7 May 2008)

Again this is not a quick trading halt and then announcement, which is the way it should be. This means that they are probably still negotiating - down to the wire. 

Not good considering they have had extension upon extension. If they receive another short term (week) extension today I expect the stock will free fall to the low .4's or .3's.


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## Lavender689 (7 May 2008)

From what we've been informed so far-i.e. most banks have agreed to the extension till Sept 30, 08, I don't see much chance of a one week extension for the whole debt. Even if it is, due to the tight timeframe for finalising the final documentation, I am sure that they will make that absolutely clear in the announcement. 

However, depending on the availability of assets to be sold at reasonable price, and the time frame, I do think that there are chances that the AUD200mln loan of the dissenting German bank - WestLB may be extended for a period shorter than the c. 5 month of the remaining exposure.   This is based on my work experience and from the prospectives of lenders to problematic borrower. 

In view of the above, I don't see there being much likelihood for share price to go down to below 40c.  Again, this is my personal opinion only.


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## Lavender689 (7 May 2008)

Wall Street Journal Article from another forum:

The positive side is that apart from WestLB, which is believed to have security over its exposure, the other local banks are believed to have agreed to an extension till Dec., 15.  Sounds reasonable, doesn't it.

I don't see the likelihood of CNP going into receivership/bankruptcy court at all.   It is more likely that the West LB exposure will be financed out by the remaining lenders.   

-----------------------------
"I saw this on HotCopper this morning (not sure if I'm allowed to post such articles from other forums - if not, sorry mods). Sounds pretty good:

WSJ(5/7) What's Brewing In The Real-Estate Market
07/05/2008 9:58AM

From THE WALL STREET JOURNAL

[What's Brewing in the Real-Estate Market]


Centro See-Saw

Shopping-center owner Centro Properties Group, which needed to secure its fourth repayment extension on $4.9 billion in debt by Wednesday, had to grant one of its lenders a mulligan to do so.

Centro, which owns roughly 680 shopping centers in the U.S. and 130 in Australia, was on the verge of getting a 7 1/2-month extension when one lender balked two days before the April 30 repayment deadline, people familiar with the matter say. German bank WestLB, which holds less than $200 million of Centro's debt, had just received a $7.8 billion bailout from the European Union and wanted more time to consider the deal.

The banks then granted a seven-day interim extension to resolve the matter. In a deal expected to be announced Wednesday, the banks have agreed to extend the deadline to Dec. 15, according to people familiar with the talks.

The catch: WestLB gets to revisit its decision late this month or early next, once again examining data that Centro will provide it about its operations, these people say. If WestLB elects to bolt from the extension, it could mean that Centro or the other banks will have to pay its claims or that Centro will end up in the Australian equivalent of bankruptcy court. Both Centro and WestLB declined to comment.


-- Kris Hudson, Alex Frangos and Lingling Wei "
-----------------------


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## wildkactus (7 May 2008)

I suppose a lot of weather CNP gets it's extensions or new loans would be down to weather the banks need the cash to keep themselves afloat.

I would think that it would be better to keep CNP going and have a better chance to get all the Loan money back after this credit crunch, then fire sale off the properties for a less then market return. 

But we will see shortly I guess.


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## Lavender689 (7 May 2008)

I reckon, more likely than not, some of the banks with exposure expiring April 30, have longer-term exposure to CNP as well. Hence, it makes sense for them to tide CNP over the current difficulties and get better recovery later on.

The key things are that: (1). cash flow is still sound and able to pay interest at least;
(2). from the banks' prospective, lending to property trust is meant to be viewed on a long-term basis. Economic cyclicalities are just the nature of the business. That said, we note also that CNP's retail properties are mostly for more defensive food and groceries retail, which are not so much so subject to cyclicality compared to Westfield's properties that are mostly for discretionary spending of consumers. 

This is why there was news report that Westfield has planned to double its construction investment in retail property this year.

It may well be that CNP will request WestLB to extend their AUD200mln for a short term, to allow them to either get it refinanced by other banks, or repay WestLB via asset sale. 

In a nutshell, the obstacle caused by WestLB, which is understandable from WestLB's prospective is not going to reverse the overall trend of extension, even more likely than not until  Dec. 15. 

Legally, it is not difficult for WestLB to agree to a short-term extension for their exposure, as they have charge over security, which they can liquidate for repayment (this is under the premise that the security is sufficient to cover their exposure and related costs, which I believe is the case here).

I reckon also, WestLB will also take into account client relationship aspect in making their decision, despite the understandable situation they are in at the moment.


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## Lavender689 (7 May 2008)

West LB secured loan of c. AUD200mln

I reckon, AUD200mln is just a minor amount in the whole scheme of things. More importantly, the loan is secured.

If the remaining banks were to refinance this loan on the same basis, i.e. secured, and supposingly West LB's security more than covers its exposure.  It is not a difficult decision for the remaining banks to make.

It is just a matter of time to finalise the approval and documentation.  

I am very positive that the announcement will be good, especially considering report that the other banks have agreed to extend to Dec. 15. 

Cheers, L


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## Nathan_b (7 May 2008)

from what i gather i belive something is inthe bag, have heard leaks of all different roumors but the best of all the Westlb trouble isnt centros problem, its westlb's. so they either need to pass the debt on or keep the lending. the money is unsecured debt. so if they wish to appoint administrators they can join the que with shareholders first.


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## Lavender689 (7 May 2008)

Are you sure that the WestLB loan is unsecured?  I was of the impression that it is secured. 

;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;


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## Nathan_b (7 May 2008)

look at their half yearly reports.

it is unsecured...

could be the magic link ey?

i would love to see this feller trade today with ann before close, but from speaking with centro, this ann is going to have a lot of info in it and will need time to digest, what i can report is ANN is 100% today.


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## Lavender689 (7 May 2008)

Thanks, Nathan for your clarification.   I agree with you that there should be a lot of info in the announcement expected to be released today. It must be carefully worded not to cause significant swings.


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## Nathan_b (7 May 2008)

Lavender,

Totally agree, my thought is extension is set,, but some condions, if the conditions arent set properly in annouyncement then it may be negative to the SP.

they have confirmed there will be detailed report today.

i think centro has a real deal today.


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## propergeez (7 May 2008)

I tell you what getting up at 5.30AM to go through US trading, AUS early trading, then to wait for the ASX to open at 7 am, whilst waiting for the CNP announcement all day is a pain in the backside. However I am on a lovely beach on Koh Chang island in Thailand and finally the sun is out after catching the tale of Cyclone Nagris for the last few days. Roll on 1pm I need a dip!


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## Lavender689 (7 May 2008)

Market depth bids for buying seems to be going up, with indicate price going up from 47.5c to 48 c now, buy order surpassing sell order by 46152 as at 16:15pm.  It seems positive. 
Hopefully this reflects the leakage of good news in the announcement.


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## Lavender689 (7 May 2008)

Nathan_b said:


> Lavender,
> 
> Totally agree, my thought is extension is set,, but some condions, if the conditions arent set properly in annouyncement then it may be negative to the SP.
> 
> ...




Nathan,

Where did you get the confirmation from? Did you speak to the Investor services "IS"?  I saw in some other forum that the lady at the IS said she was not sure. 

Pls kindly confirm.

Thanks, L


----------



## Nathan_b (7 May 2008)

Lavender,

Yes i rang investor services, and they said that there will be an announcement today.

As far as detailed report it was mentioned in an artricle.

The IS woman definately confirmed the ANN today when i rang.


----------



## nioka (7 May 2008)

Lavender689 said:


> Market depth bids for buying seems to be going up, with indicate price going up from 47.5c to 48 c now, buy order surpassing sell order by 46152 as at 16:15pm.  It seems positive.
> Hopefully this reflects the leakage of good news in the announcement.




 There has been very little change in the sellers during the day. I have had a sell in at 60c for more than a week. During that time my place in the queue has varied from the low 200s to the low 500s. Today I was between 318 and 322 all day. That indicates that most people are WAITING. I can't see anything in the quotes that indicates a leak of information.


----------



## Lavender689 (7 May 2008)

I remember seeing a post in another forum this afternoon that they got AUD50mln from ANZ.  Did anyone see anything like this? 

I also noticed that the indicative price for CER is currently at a lower 46.5c, compared to 47 c previously, and last close of 48c.  Are they getting any dividend from CER to cover the loan shortfall?  Just an uneducated/informed guess.  

Does anyone have any idea?


----------



## Lavender689 (7 May 2008)

Nathan_b said:


> Lavender,
> 
> Yes i rang investor services, and they said that there will be an announcement today.
> 
> ...





Thank you, Nathan. 

That's good. Perhaps they (people in other forum) were talking to a different person at the IS.


----------



## Nathan_b (7 May 2008)

If you read in other forum you will find the attached article, and they are correct deadline is today like the deadline on valentines day.

ANN must be today weather company has gone belly up or it has refinanced.

goodluck everyone, i know myself i have lots riding on this one.

Nath.






MELBOURNE (Dow Jones)--Centro Properties Group (CNP.AU), the Australian shopping mall owner facing a midnight deadline on refinancing A$2.8 billion in debt, will make an announcement before the market opens Thursday, a company spokesman said Wednesday.

Earlier Centro halted trade in its stock and in Centro Retail (CER.AU), a property trust it manages, pending the announcement.

Last week the company, which had A$6.6 billion in mature debt, was granted a seven-day extension to renegotiate debt and avoid bankruptcy. U.S. and European banks in February gave Centro until Sept. 30 to refinance loans on the condition that other lenders granted a similar extension.

"We wait with baited breath on news," said Credit Suisse in a client note, adding the company was "too big to fail."

"If it were to collapse, and its A$9.5 billion empire were liquidated, the impact on Australian property values would be dramatically negative" and the banks' collateral would also be diminished.

Centro, which has a portfolio of 803 malls in the U.S., Australia and New Zealand worth A$24.9 billion, incurred the debt through a A$10 billion spending spree on U.S. assets in the past two years, and has been struggling to refinance after the credit crunch increased borrowing costs.

The company said last week it was close to finalizing terms for an extension until at least Sept. 30 on facilities that matured April 30 with all of its financiers except one owed less than A$200 million.

All of its lenders, including an Australian banking syndicate owed A$2.3 billion and U.S. noteholders who loaned US$450 million, have indicated support for the longer-term extension, Centro said.

Its lenders include Australia and New Zealand Banking Group Ltd., National Australia Bank Ltd., Commonwealth Bank of Australia Ltd., Royal Bank of Scotland, BNP Paribas, Japan's Sumitomo Mitsui Banking Corp. and Germany's WestLB.

The Wall Street Journal reported Wednesday, citing people familiar to the situation, the banks have agreed to extend the deadline to Dec. 15.

However, West LB, which holds less than US$200 million of Centro's debt and had just received a US$7.8 billion bailout from the European Union and wanted more time to consider the deal, the newspaper said.

"If WestLB elects to bolt from the extension, it could mean that Centro or the other banks will have to pay its claims or that Centro will end up in the Australian equivalent of bankruptcy court," the newspaper said.

Centro had A$4.2 billion in debt that matured April 30, while Centro Retail Trust, a property trust managed by the Melbourne-based company, had A$1.2 billion, and associated funds - Centro Australian Wholesale Fund and Centro MCS - had an additional A$1.2 billion, it said.

The company, which had debt of A$17.5 billion at Dec. 31, has lost more than A$4 billion of its market capitalization since Dec. 17 when the company informed the market about its shortfall on A$2.9 billion, which was later revised to A$3.9 billion and since escalated.

Centro Properties stock last traded Tuesday at 47 cents, while Centro Retail shares were last exchanged at 48 cents each.

The company is seeking buyers for two of its unlisted funds, Centro Australia Wholesale Fund and Centro America Fund, which have assets of A$3.7 billion.

Centro is being advised by Lazard Carnegie Wylie, which is handling the sale of its Australian Wholesale Fund, while its U.S. parent is negotiating the sale of Centro's America Fund.



-By Andrew Harrison, Dow Jones Newswires; 61-3-9671-4323; andrew.harrison@dowjones.com



(END) Dow Jones Newswires

May 07, 2008 02:28 ET (06:28 GMT)

Copyright (c) 2008 Dow Jones & Company, Inc.


----------



## propergeez (7 May 2008)

Lavender689 said:


> I remember seeing a post in another forum this afternoon that they got AUD50mln from ANZ.  Did anyone see anything like this?
> 
> I also noticed that the indicative price for CER is currently at a lower 46.5c, compared to 47 c previously, and last close of 48c.  Are they getting any dividend from CER to cover the loan shortfall?  Just an uneducated/informed guess.
> 
> Does anyone have any idea?




Hi Lavender689,

The pricing on all platforms out of hours is not really indicative of the real pricing we will see AFTER announcement AND 3 - 0 minutes before open. All before that is conjecture and I wouldn't bother looking.

Sorry.


----------



## Nathan_b (7 May 2008)

as to the ANZ rumour, i know where that came from and apparently this was going on about 1 month ago.

i doubt has any connection with todays drama, also i doubt we will see this in administration.

its pretty clear this will pull through as it has lots of support off banks and other lenders.

if centro falls, every stock on ASX 200 will be in trouble because this company has good fundamentals and great cashflow.


----------



## propergeez (7 May 2008)

Nathan_b said:


> If you read in other forum you will find the attached article, and they are correct deadline is today like the deadline on valentines day.
> 
> ANN must be today weather company has gone belly up or it has refinanced.
> 
> ...




The cut off for agreement with the banks is today (unless short term extension), the announcement to ASX can come later, ie tomorrow morning


----------



## Nathan_b (7 May 2008)

propz, 

100% confident ann will come out, i would take a guess between 5-9pm tonight.

i even put a $20 on the table it will be out today.

regards,

Nath.


----------



## Lavender689 (7 May 2008)

propergeez said:


> Hi Lavender689,
> 
> The pricing on all platforms out of hours is not really indicative of the real pricing we will see AFTER announcement AND 3 - 0 minutes before open. All before that is conjecture and I wouldn't bother looking.
> 
> Sorry.




Propergeez,

I know that it is not a indication of what the price is going to be tomorrow at open, but it does give a hint of market sentiment at present, doesn't it?

Thanks, anyway.  L


----------



## mihamilton (7 May 2008)

Just called the IR lady. Based on her tone, it doesn't seem she knows anything about it. Even tho she said the ann will be tom, I think the ann will be made between 5-630pm


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## Nathan_b (7 May 2008)

keep an eyeout @ www.centro.com.au

that is where you will see an ann not the asx most likely.

remember last time big ann like this was 9pm friday night.


----------



## nioka (7 May 2008)

Lavender689 said:


> I remember seeing a post in another forum this afternoon that they got AUD50mln from ANZ.  Did anyone see anything like this?
> 
> I also noticed that the indicative price for CER is currently at a lower 46.5c, compared to 47 c previously, and last close of 48c.  Are they getting any dividend from CER to cover the loan shortfall?  Just an uneducated/informed guess.
> 
> Does anyone have any idea?



 A cent or two in the indicative price means little. Orders being placed now are not shown until tomorrow morning. A check at 9am tommorrow will be a better indication. Of course if there is an announcement before then there will be some hectic bidding one way or another.


----------



## Nathan_b (7 May 2008)

Looks like we have a december 15 deadline!

what would this mean? it means a lot of things, first i would expect this will show a lot of confidence in CNP and SP rise, may mean they can trade out and get refinance by then, means they aint going into liquidation, theres to much at stake to squash centro.

Enjoy the read.


Centro See-Saw
May 7, 2008; Page C12

Shopping-center owner Centro Properties Group, which needed to secure its fourth repayment extension on $4.9 billion in debt by Wednesday, had to grant one of its lenders a mulligan to do so.

Centro, which owns roughly 680 shopping centers in the U.S. and 130 in Australia, was on the verge of getting a 7 ½-month extension when one lender balked two days before the April 30 repayment deadline, people familiar with the matter say. German bank WestLB, which holds less than $200 million of Centro's debt, had just received a $7.8 billion bailout from the European Union and wanted more time to consider the deal.

The banks then granted a seven-day interim extension to resolve the matter. In a deal expected to be announced Wednesday, the banks have agreed to extend the deadline to Dec. 15, according to people familiar with the talks.

The catch: WestLB gets to revisit its decision late this month or early next, once again examining data that Centro will provide it about its operations, these people say. If WestLB elects to bolt from the extension, it could mean that Centro or the other banks will have to pay its claims or that Centro will end up in the Australian equivalent of bankruptcy court. Both Centro and WestLB declined to comment.


----------



## Lavender689 (7 May 2008)

Nathan,

The article you posted were out there early in the morning.  
I also noticed someone on another forum advised that it was a Sky Breaking News that extension till Dec. 15, was granted.   Not sure whether it was from reliable source or not. Nowadays, you can't totally believe the media.

Anyway, I saw at least two mentions of Dec.15 extension from different sources today. It should not be out of nothing.

Let's keep our fingers crossed!
L


----------



## Lavender689 (7 May 2008)

WSJ article re extension till Dec. 15 from another forum.

West LB extension also secured!!!

----------------------------

By a staff reporter, with AAP 

Centro Properties Group has been granted a 7 and a half month reprieve until December 15 to repay $4.9 billion in debt, The Wall Street Journal reports. 

The troubled shopping centre owner has secured its fourth repayment extension from German lender WestLB, sources told the paper. 

Earlier, Centro Properties Group Ltd and Centro Retail Group Ltd were placed in trading halts pending the release of an announcement.

Centro Properties Group shares last traded at 47 cents, while Centro Retail Group shares enter into the halt at 48 cents.

Securities in both companies will not be traded until either normal trading begins on May 9, or an announcement is made. 

Last week, Centro was granted a seven-day extension until Wednesday to finalise a longer-term extension on $2.3 billion in debt owed to its Australian lenders. 

WestLB is believed to be the “local” lender that is holding out on approving Centro’s request for a five month extension to refinance its domestic debt.

The extension also effectively covers another $US450 million ($473.98 million) in US private placement notes whose holders have agreed to act in line with Australian extension arrangements. 

Complicating the picture are two other debt obligations of $US1.3 billion ($1.39 billion) and $US1.2 billion ($1.29 billion) owed by Centro and Centro Retail Trust for their US joint venture. 

Those debts already had been refinanced to September 30 but the extensions also were contingent on Centro's $2.3 billion debt due on April 30 being refinanced. 

Centro's troubles began after it borrowed heavily to pay for acquisitions to spearhead expansion, especially in the United States. 

It was caught out by the global credit crunch and struggled with the leverage on its 800-centre property portfolio, spanning Australia, New Zealand and the US. 

With around $25 billion in assets under management, Centro is Australia's second largest shopping centre owner. 

Last December, Centro and its stable of companies admitted their difficulty in refinancing short-term maturing debt. 

Centro is trying to pay down its debt by selling some of its portfolio, including one of its Australian wholesale funds that holds 28 properties. 

According to reports, WestLB is said to be resisting the extension as it deals with its own debt issues that have already resulted in the German government pumping $8.3 billion in to company to prop it up.

This week Centro Properties Group revealed that only one local lender, owed less that $200 million, was yet to agree to the September 30 extension.


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## Nathan_b (7 May 2008)

Lavender, i have read this aswell....

boy i hope they are right, im very optimistic about this, i have heard from scources that this will be the case, but also had an inkling that there may be a nasty, which if what we are talking about is true and confirmed today or tomorrow (sure today tho) there should not be any nastys.

centro will release the detailed report that should be clear cut outlining there plans and the outcome in detail. that is what i heard confirmed by IS earlier on.


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## tulasi74 (7 May 2008)

Thanks for the article Lavender but it doesn't exactly read correct.  The last paragraph says refers to Centro announcement made last Thursday and but says that was this week.  Second last paragraph said West LB is said to be resisting.  

I have been following all the articles on Centro and the second third of the article looks like an article that was released earlier and doesn't actually appear to confirm information in the first paragraph.

Can you confirm if the information is all from one article or a number of articles?


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## Nathan_b (7 May 2008)

tulasi,

the article was written and pates added to it when they get the news. its not all current just gets stuff added to it each time its updated.


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## Fed23 (7 May 2008)

Centro Properties Group, the Australian owner of about 650 US malls, halted trading in its shares as the Wall Street Journal reported the company may be granted an extension to December 15 to repay lenders owed $US4.9 billion of debt

here is the article: http://business.theage.com.au/centro-gets-debt-extension/20080507-2bxb.html

Extension till Dec, that means the share price should not dip any lower right?


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## Nathan_b (7 May 2008)

we need an announce ment to confirm all of this.

otherwise sp may fall, i heard there may be an extension till 30th may then extension till 15th december. 

lets just hope its all good and we get that nice detailed announcement.


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## Lavender689 (7 May 2008)

Nathan,

Not sure where the May extension is from. However, I guess from reading the article on the Age re West LB to be opted out in June 08, it may well be that what you were reading were referring to that.

In my view, no matter it is a two-stage extension or a straight extension to Dec. 15, it is going to be very good news. 

I presume we need to have full confidence that the longer-term extension will happen. 

I was wondering if they release the news tonight, where will they be releasing it on? Was the previous 10pm release on ASX website?

I presume it is more likely tomorrow morning.

Pls kindly comment on this, I am not that familar with the rules for announcement well outside trading/business time.

Thanks, L


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## Nathan_b (7 May 2008)

Lav,

will be on centro website.

yes the june thing is nicely placed in the news article.

a little birdy told me that there was going to be extension till end of may. if we get extension till end of may, i think it will be iminent fall in price. people are expecting september min, may extension will show uncertainty.

if it extends till decmber with june review that sounds really good.

we just need to await the ann.


----------



## Nathan_b (7 May 2008)

Just spent 1 hr looking for the time of the feb 15th ann.....

took me forever.

it cam out on www.centro.com.au @ 22:52 on 15th Feb 2008.

Theres still 1 + 1/2 hrs left till midnight.


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## Lavender689 (7 May 2008)

Nathan,

Thanks very much for your hard work.

Let's just be patient and we shall get the announcement before trading anyway.

Re the May extension, I just think that if it is confirmed that West LB is allowed to opt out in June, and also given previous release that all the other banks have agreed to the extension, the May extension simply does not make sense.   

The only possibility is that they temporarily extend it to end of May just to finalise the loan documentation.  However, it would be made very clear that all the other banks have agreed to the extension, be it Sept 30, or Dec. 15.

I am positive, very much so.

Thanks, L


----------



## tulasi74 (7 May 2008)

Nathan

Thank you very much for your response to my question on the article.  That makes sense.  I actually found the first half of that info on business spectator which is quoting from what is reported on Wall Street Journal online edition.  

I have just read the article in the Age but cannot find the reference to May extension. It says West LB have been given the option to opt out of the extension if its not happy about data to be provided by Centro.  That is rather curious because I would have thought Centro would have been making all that information available in the lead up to the April 30 deadline.

I think the announcement has not been made because the extension may not be in the bag. Given all the media speculation in the last few weeks and what has happened in the last seven days, I don't think anyone in the media reported about the snag caused by one bank before the event.  It was all after the event. There has been talk about a Dec 31 deadline, then weekend financial review had 12 month extension, there was a comment by the CEO saying if they were given 12 months it would be ideal.  I wouldn't be surprised if the extension is actually for a full 12 months as Dec 15 deadline is too close to Christmas and if they were going to extend to there, they might as well extend the full 12 months and give Centro a lot of breathing room. 

When Feb 15 deadline was extended and it was in the bag, the announcement was made on Friday 12th February and my initial reaction was that it was positive as it included a provision that US banks had essentially given a Sept 30 extension subject to Aus banks agreeing to the same.  The SP did not see much appreciation because the news was also accompanied by a restatement of more long term liabilities to short term liabilities and it increased the mountain of debt that became due and payable within a short timeframe.  

This time around if all the large banks have agreed to extend their debt to whenever, i.e. Sept 30, Dec 15, Dec 31 or April 30 2009 and only the 200 mln may be due and payable before that time and Centro has the option of using proceeds from asset sales or new equity injection to pay the 200 million, the surely the share price should see some significant appreciation. Not sure how many of you are followers of technical analysis but the bollinger bands on the daily charts have narrowed a lot and this suggests that a strong move is imminent but direction is unknown but if debt extension is confirmed the probability is that it will be up.

So Lavender, I agree with you that it is more likely going to be really good when the news eventually comes and those who have taken a punt should reap some reward for the risks they have taken.  

Tulasi


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## tulasi74 (7 May 2008)

In my earlier post I said when Feb 15th deadline was extended, they made the announcement on Friday 12th February. That was actually 15th February.

Not sure how much longer I am going to keep refresing the centro.com.au


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## tulasi74 (7 May 2008)

Earlier there was mention of Sachs disposing of 15 million shares.  Just looked in detail at the announcement and while this was done over a period between February and May around 8 million was sold between 29 April and 2 May.  Hopefully they were just doing something that I once did which was to switch out of CER in favour of CNP because I felt that CNP had gone down more than CER in relative terms and therefore more likely to have greater appreciation in SP than CER.


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## tulasi74 (8 May 2008)

Article in the Brisbane Times says that Centro have been given another 48 hours to finalise documents with bankers and that they are expected to secure an extension to December 15.

The interesting thing about the article is a suggestion that part of West LB's concerns are to do with CNP's ability to service their debts.  I interpret service their debts as relating to their ability to meet the costs on borrowings, i.e primarily interest plus any costs involved in negotiating these expenses.  This is something I raised a while back where I said that in their last financial statement showed an operating loss even after the asset writedowns were excluded.

It will be really interesting to see if they disclose any information on how much the extension is going to cost them in the way of increased borrowing costs given the increased cost of borrowing these days.


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## Lavender689 (8 May 2008)

Dec. 15 extension seems to be set now, an inital 48-hr extension to finalise the documentation.   WHich is just to cover legal requirements. 

Don't panic at all!


TOP News
Centro to get Dec 15 debt reprieve 5:15 AM 

The Spectators

Centro Properties Group has been granted a seven-month reprieve until December 15 to repay $5.7 billion in debt, The Wall Street Journal has reported in its online edition. 

The troubled owner of close to 700 US shopping malls, currently in a trading halt, is close to securing its fourth repayment extension from German lender WestLB, which holds $200 million of Centro debt, sources told the paper.

The reprieve would give Centro more breathing space to proceed with its program of asset sales, in order to placate its US and domestic lenders and avoid being placed in receivership.

Under the terms of the deal, WestLB will revisit its decision later this month or early next month after Centro provides more data on its operations, the Journal said.

If WestLB is unhappy with what it sees, it can revoke the extension and Centro would be liable to immediately pay down the debt.

WestLB is believed to be the “local” lender that was holding out on approving Centro’s request for a five-month extension to refinance its domestic debt.

Centro is expected to annouce a 48 hour extension on its debt refinancing deadline as its lenders finalise a more lengthy extension, The Australian Financial Review reports.


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## tulasi74 (8 May 2008)

Hey Lavender

I am not panicking at all but I am being realistic about what the Dec 15 actually means and the effect it could have on the share price.

I started looking at Centro in December after the crash and got sucked in by the move from a low of 46cents one day to a high of 1.495 the next two days.

Recently when it looked like they were going to survive and the debt deadline was going to be extended for long period, I anticipated huge rises in the share price similar to December and it did not happen. 

I am just putting those posts that don't paint a very bright picture because that is the reality of the business.  The Dec 15 extension means they have longer time to work out if they can save the business but it doesn't change the fact that they still have a hell of a lot of debt in their books and debt costs have been rising which will reduce their operating profits and given the size of their debts, put them into an operating loss situation.  In effect, shareholders get nothing and banks get everything in effect from their revenues.

If they are unable to reduce debt and banks pull the plug, the question to ask is whether the shareholders can get anything from what is left of shareholders equity.  If you look at their balance sheet, net tangible assets is $1.35 per share as per last financials and they have roughly 845 million shares on issue.  That works out to be $1.14 bln in net tangible assets and this equates to roughly 4% of total assets of $25 bln. What this effectively means is that potentially a small decrease in asset valuations can have a significant impact on shareholder equity and can wipe it out.

Banks have no doubt given the extension because they know that if their loan is unsecured, they have to share the spoils with shareholders and if they force centro into a fire sale scenario, they will potentially lose more than if they allowed them to sell assets in an orderly fashion and in the meantime milk all the revenues from the business.

Centro's best bet is what was suggesting in a Business Spectator article last week, i.e. try to find new equity by creating new syndicates which can hold the best assets of their Australian Wholesale Fund and they retain 50% ownership funded by bank loans and remaining 50% funded by new investment which can be used to reduce debt.  Thankfully all their MCS syndicates have had great returns in the past but it must be remembered that given the higher cost of borrowing, the new syndicates will not have the same rate of return and it will be hard for them to attract new investors to their syndicates especially as their reputation has been tarnished by what has happened in the last 5 and half months.

These I just my thoughts on the issue.  It doesn't mean that I have it right.  Despite knowing all this, I am a gambler and took a punt and bought more shares last Monday.


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## Lavender689 (8 May 2008)

Hi Tu,

When I say don't panic, I mean this time 48-hr extension is just to allow them time to finalise legal documentation for longer-term extension. Not like last time when there were still a lot of uncertainties around.

I agree with your analysis. However, at this stage, the key issue for CNP, technically is survival.  Certainly, interest rates are higher, and they are paying penality rates for the extension, this is just normal banking practice for companies in trouble.   Once they reduce their leverage by ideally raising equity, or selling assets at more reasonable price as the property price recovers, they will not be paying such high interest rate anymore - I mean they will gradually be in line with the other property trusts in this market.

The positive note also is that the retail property sector here is still performing well and has good prospects, this is evidenced by Westfileld's recent plans to double its investments in retail property construction.

Once they get over this period of difficulties, they will be fine.   This is why the banks are willing, though also have to extend the loan.    Property price ups and downs are just  part of the nature of the biz, it was just exagerated by the US subprime mortgage crisis. 

In summary, at this point it is a matter of survival, and then they will gradually return to business as usual/normal.

thanks, L


----------



## tulasi74 (8 May 2008)

Hi Lavender

Thanks for your response.  Yes I misunderstood what you meant by panic.

I agree with you that survival is key here and I am really, really glad they have been given the opportunity to survive.  My exposure to CNP is huge.  Unfortunately I have a day trader's mentality and find it very hard sometimes to sit on shares for the long term and hence have missed out on a lot of good runs.  

Am hoping to reduce my exposure significantly soon but have had to scale down my expectations with the news of the higher borrowing cost and take what I can.

Good luck to you and all other CNP punters out there.

Tulasi


----------



## Nathan_b (8 May 2008)

Problem is now there are day traders playing all sorts of games on this poor share. it can bounce really hard, and i also been very let down by outcomes and SP reaction.

It appears this is true, as far as extensions go. I belive that Westlb have requested for the debt to be secured as its currently unsecured. 

This will be Positive on SP IMO.


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## Lavender689 (8 May 2008)

There should be some announcement this morning, perhaps just at 10am. Remember the Age article did mention that there will be an announcement before start of trade on Thursday.   Also businessspectator.com.au  article mentioned an 48-hr extension to finalise the doc.

Unless something unexpected happened overnight, I don't see any reason why there should not be an announcement.

Just a question here, what are the ASX rules for announcement, do they have to release the info immediately after some price sensitive event has happened, or is there a time lag, say 1 day or 2 for them to make the announcement?

It sounds like the midnight last night announcement deadline believed by some was not correct.

Just for our knowledge, could anyone pls kindly clarify on this for all of us?

Thanks, L


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## Nathan_b (8 May 2008)

They can take their time in the THalt.

i am thinking when there reporting the 48hours that the jurnos are refering to a trading halt.


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## propergeez (8 May 2008)

Nathan_b said:


> They can take their time in the THalt.
> 
> i am thinking when there reporting the 48hours that the jurnos are refering to a trading halt.




There are three things CNP can do:

1. They have until the beginning of trading tomorrow on the current Trading Halt request
2. Make announcement (anytime today) and then trade
3. Extend the trading halt


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## Lavender689 (8 May 2008)

see the article below. 

high penalty interest charged on extension according to the report.

http://www.theaustralian.news.com.au/story/0,25197,23661055-643,00.html


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## Lavender689 (8 May 2008)

Extension secured, ASX announcement this afternoon
Thanks to the last minute intervention of JP Morgan!

http://www.theaustralian.news.com.au/story/0,25197,23664405-643,00.html


Centro secures debt deal with banks

CENTRO Properties Group has won support from its banks for a seven-month extension on its debt maturities.

The decision came after some last minute intervention from JP Morgan Australia chairman Rod Eddington who convinced wavering Commonwealth Bank to back the deal. 

German bank West LB also agreed to the extension. 

Centro (ASX: CNP: quote) is expected to release a statement to the ASX this afternoon confirming the news. 

This gives the company more time to restructure it self and to sell property to meet its debt obligations. 

The Commonwealth Bank had demanded more security before agreeing to the extension and substantial changes to the documentation which was eventually partially agreed to. 

This followed late night talks between Sir Rod Eddington and Commonwealth Bank chief executive Ralph Norris. 

CBA has a $1.1 billion exposure of which just $160 million is unsecured, while JP Morgan has the biggest exposure of all banks totalling some $2.05 billion.


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## Nathan_b (8 May 2008)

LOOKS GOOD TO RUN GUYS!!!

Check this article that just came across my desk 1 hr ago

Source: www.theaustralian.news.com.au [Breaking News]

Sir Rod rescues Centro
John Durie | May 08, 2008

CENTRO Properties Group has won support from its banks for a seven-month extension on its debt maturities.

Last-minute intervention from JP Morgan Australia chair Sir Rod Eddington convinced wavering Commonwealth Bank to back the deal, and German bank West LB also agreed to the extension.

Centro is expected to release a statement to the ASX this afternoon confirming the good news.

This gives the company more time to restructure itself and to sell property to meet its debt obligations.

While some have focussed on WestLB and its $186 million exposure, it was actually the Commonwealth Bank which proved to be the most intransigent, as the deadline which threatened to put the group into insolvency loomed last night.

CBA demanded more security before agreeing to the extension, and substantial changes to the documentation, which was eventually, and partially, agreed to.

This followed late night talks between Sir Rod and CBA boss Ralph Norris.

CBA has a $1.1 billion exposure, of which just $160 million is unsecured, while JP Morgan has the biggest exposure of all banks, totalling some $2.05 billion.

JP Morgan was also closely aligned to Centro’s former boss, Andrew Scott, and had played a key role in the expansion of the company.

Most of the banks have security against property that is performing to plan, but the trouble has been the structure of the company - so complex that no one really knew who had security over which asset.

Centro’s argument with the bank has always been that any decision to put the company under would destroy significant value, including the roughly $240 million in funds management earnings.

This worked to a point, and the banks have agreed to a new December 15 deadline.

This will be the last extension, unless some progress can be made on the restructuring.

duriej@theaustralian.com.au


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## Lavender689 (8 May 2008)

I know it doesn't mean much at Trading Halt. However, CER's indicative price is 42c, and CNP 48.5c at this stage.

What could that possibly indicate, I mean CER at 42c?


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## nioka (8 May 2008)

Lavender689 said:


> I know it doesn't mean much at Trading Halt. However, CER's indicative price is 42c, and CNP 48.5c at this stage.
> 
> What could that possibly indicate, I mean CER at 42c?




 I don't know how you relate one to the other. The organisation with these is so complicated that I doubt if even the directors can fully understand it. I would say that the reason this business is taking so long is that the banks couldn't understand it either.

 Position in the market is a good indicator for me as I am still in the high 280s with a sell order for CNP at 60c. It hasn't moved more than 4 places all day. I'm expecting it to have a sell result in the next day or two unless some institution has a lot more stock to unload.


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## tulasi74 (8 May 2008)

Hi Lavender 

CER was trading better than CNP because its debts supposedly were secured because they had direct property ownership over assets while the head company, CNP's interest in direct property is through the various layers of ownership at CNP.  So CER was seen as a safer investment when it looked like CNP might go under as those who held CER shares were possibly more likely to get something back.

Now that CNP looks like it might survive, then its shares will probably trade better than CER.  I think CNP share price before the plunge may have been as much as 3 times CER.

Time will tell whether the difference in the share price between the two increases.

Any thoughts on what the share price action will be on confirmation of the news?

Tulasi


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## propergeez (8 May 2008)

Well its now officially on the Dow Jones news wires:

"MELBOURNE (Dow Jones)--Centro Properties Group (CNP.AU), the Australian property trust struggling to refinance A$6.6 billion in debt, Thursday won an extension until Dec. 15 from banks on a parcel of A$2.8 billion of debt that matured April 30, a person familiar with the situation.
Centro Wednesday halted trade in its stock and in Centro Retail (CER.AU), a property trust it manages, pending an announcement about the debt extension talks.
Last week the company was granted a seven-day extension to renegotiate debt and avoid bankruptcy. U.S. and European banks in February gave Centro until Sept. 30 to refinance loans on the condition that other lenders granted a similar extension.
-By Andrew Harrison, Dow Jones Newswires; 61-3-9671-4323; andrew.harrison@dowjones.com

(END) Dow Jones Newswires
May 07, 2008 23:22 ET (03:22 GMT)"

I think they will announce after hours though, I am hoping for a lengthy announcement.


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## propergeez (8 May 2008)

CER announcement is good but same as before.

CNP well to say it has its hands tied behind its back and is drowning is an understatement. The extension is good, however the announcement realizes the seriousness of their predicament. The banks have put so many caveats into the agreement that any would be potential buyers just have to wait it out and get the properties that they want at fire sale rates.


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## qazw80 (8 May 2008)

ASX/Media Release

*Centro Announces Extension of Financing Arrangements
--Australian Facilities & US Private Placement Notes
Extended to 15 December 2008 --*

Centro Properties Group (Centro) announces that its Australian financiers and US private placement noteholders have agreed to a further extension of facilities until 15 December 2008.

The facilities are comprised of the following:
- $2.3 billion in aggregate owed to the Australian lending group; and
- US$450 million owed to US private placement noteholders.

In connection with these arrangements, Centro and certain of its wholly owned subsidiaries have provided security by way of fixed and floating charges1 and some US real estate mortgages to the Australian financiers, US private placement noteholders and US lenders.
The extension arrangements are subject to certain conditions being met by the following dates:

_30 May 2008_

- Finalisation of an additional liquidity facility as described below; and
- Finalisation of certain inter creditor arrangements between the financiers,
concerning:
- The consent process for refinancings, portfolio or asset sales and the
application of such proceeds; and​- The legal form of the inter creditor security to be given by certain US
entities.​
If the above issues are not finalised by 30 May 2008, the further extension arrangements may be terminated. In such circumstances, the financiers would lose the benefit of the security which Centro has granted to them in connection with these extension arrangements.

_30 September 2008_

- The Australian financiers and US private placement noteholders being satisfied as to Centro’s progress in implementing its strategic plan; and
- The US lending group, which is owed in aggregate US$1.1 billion (A$1.2billion) associated with Centro’s joint venture with Centro Retail Trust (CER), agreeing to further extend those facilities from 30 September 2008 to a date no earlier than 15 December 2008.

The US lending group have confirmed their consent to the extension of the Australian facilities outlined above and have confirmed the extension of the US joint venture facilities to 30 September 2008.

If the above issues are not finalised by 30 September 2008, the extension arrangements may be terminated.


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## tulasi74 (8 May 2008)

There is also information on any penalty interest and CNP have got extension with only an additional interest margin of 1.75% that was agreed to earlier.  The additional interest on 6.6bln works out to be roughly 1 million per month. Reduces earnings per share by 2 cents so that is really not much of a penalty.  So provided their businesses are performing well which is what the CEO has been saying they should be ok to meet their borrowing costs.

One of the conditions that was attached to their last extension was provision of a cashflow statement to all the banks by March 6. Surprises me that two months the banks would have had to look at that information wasn't sufficient and final agreement took another week.

Additional liquidity of 100mln needs to be negotiated by 30 May 2008 from US banks. This money is supposedly for capital expenditure, adviser fees and higher costs of negotiation. You have to wonder how much they are paying their advisers.  

Does anyone have any thoughts on whether the announcement will have a positive impact on share price?  My initial thoughts are that the share price will trade in a range of maybe 40 - 55 cents until May 30 deadline and might only track higher after that date.  Would really appreciate hearing the thoughts of forum members following CNP.  Thanks.

Tulasi


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## Nathan_b (8 May 2008)

GEEZ, this is like the election in November, if you wernt watching tv for 4 hours and u turn the tube on it was a completely different world.

I been out, had a few calls and messages about it, come home and seen what we have at hand.

This is fantastic news. I was worried for holding a chunk of T3 CNP. IMO this extension has not been factored into SP, and we will see a steep rise over next week.

As far as i see it the banks are tied up, they want their debts bough back in place but they cant force centro into anything, as GR stated in his last webcast they are wounded, but will heal themselfs. this is true they ae buying so much time, its not funny. They even got more money off the banks. GREAT WORK TO THE TEAM AT THE GLEN, oh and Glenn. We have seen the day traders play this as a dead cat for so long now, and i strongly belive we will see the traders and shorters leave this now. there is 14 million short orders out ATM, and as far as i see it, they will be sh!tting themselves tonight massively as all us holders were last night with the unknown. i expect this to go up now, not to any silly figures like $5 but we will/should see a definate rise. IMO we will see go up down up down with a steady support between $1-$2. 
Why? when this got dumped hard last year it went down and went over $1.50 with the thought of administration, now we can see that centro has the upper hand and the banks need centro alive as much as centro needs the banks we will see this ride out. announcement the other week said that it was not in shareholders interest to sell @ current offers (90c or whatever). We will see a run, as shorts need to cover themselfs (14million) and everyone who dumped last week getting onboard, as well as people feeling its safe again. IMO we wont see instos buying in yet as it is still all too risky for them, but will see a slight sell down as proft takers get on board, and see this repeat till it finds a new resistance.

This is my T/A and you should do your own research obviously, but there is not much to base anything on until the market tells us.

we saw FG run over $1 last week IMO this is a lot better position and company then AFG, although there is a lot more shares out there getting traded in CNP. Therefore we will probably not see the same run straight up.

GOODLUCK ALL CENTRO HOLDERS!!!!

Oh and congrats.


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## mapna (8 May 2008)

I totally agreed with Nathan, this is a big step up for CNP. They need to resolve the problem together. If it went down the hills, CNP or Banks would not get any better but worse .. IMO

The last few weeks, the investors/traders have been nervous abt the outcome of the extension, now everything is clear, the banks wanted CNP to be successful so that they can recover their money+interest... IMO.

Personally, I see it as a great news for CNP and its shareholders.

DYOR ...

Congratutaion and good luck - brave holders. You deserved it.


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## nioka (8 May 2008)

tulasi74 said:


> Does anyone have any thoughts on whether the announcement will have a positive impact on share price?  My initial thoughts are that the share price will trade in a range of maybe 40 - 55 cents until May 30 deadline and might only track higher after that date.  Would really appreciate hearing the thoughts of forum members following CNP.  Thanks.
> 
> Tulasi




 I doubt if it is in order to quote a price but you will see from my earlier posts that I have sell orders in for 60c. I have an average buy price of around 41c. I have one third of my shares for sale at 60c. I expect it to get to that and possibly more in the very short term based on how I see the news. When the next week is passed I hope to be free carrying the rest of my investment in CNP by selling as few more shares as possible. Personally I can't see $1 in the medium term unless CNP can make some very good property sales and reduce debt. That's my opinion but remember I am often wrong


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## wilko66 (9 May 2008)

Apologies that this post which hasn't any direct relevance but I just wanted to comment on how great I think this forum is.  I haven't posted much as I'm not much of a share player....which is why it's so strange I too a huge punt on CNP.  

On Wednesday night I almost wore out the refresh button looking for announcements and slept like a guilty gambler.

IMO, this is great news....when the AFR speculated on good news, before the 7 day ext. we saw that the market is on a hair trigger for good news &  I hope this is still the case.  I think there'll be a way to go before the real value of the SP is recognised as there is still risk ....but a lot less than 2 days ago and clear evidence of intent on the part of the banks..

I just wanted to thank Nioka, Tulasi, Lavender, Propergeez & Nathan for their excellent opinions and discussions over last months...I have really appreciated the analysis.

I'd be interested in how many are now looking to this as a longer term investment....ie past Dec.


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## Nathan_b (9 May 2008)

Wilko, welcome aboard.

Forum is great it is a great scource of information and keeps tightly moderated for ramping etc...

I think you took a "punt" on CNP like the rest of us by doing your research and education on the company's strong fundamentals.

As far as holding, i will be dumping my T3 today or monday, and holding my main holding or part there of till the end.

Lets hope we see this puppy cut sick today and make us all have a much needed good weekend.

Cheers,
Nath.


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## propergeez (9 May 2008)

You could very well see this stock tank today, again there are more sellers than buyers by a huge amount. All it will take is a few short term investors who were looking for a quick (AFG-like) buck to get nervous and start selling off cheaper.

All of the forums yesterday were hyping up the announcement and I hope everyone got out in the early morning. For all that has been said about the announcement, it was a huge disappointment and the fact that the caveats are their mean that the banks do not fully trust Centro to get through this. Thus no big investors coming in buying the shares.


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## ProRip (9 May 2008)

i must also admit that this forum has given me great opinions to help me stay confident about this stock! THANKS 

I am also new to stocks this is my first purchase and like many others I purchased it because I believe they were\are undervalued and that the risk of this company going belly-up was highly unlikely. 

But I don't believe the extension was the announcement to set a wildfire to to stock increasing what will is when they sell a big asset with a good return on CNP (such as 50-50 sale) it looks promising that CAF may get a good deal within 30days, so we just need to wait 

Its all good to get an extension but if you can't raise any funds then things will get ugly, cross fingers for good sale contracts on both CAWF and CAF with next 3 months this would put the SP on a rocket as then they have some good stability to manage debt!!


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## nioka (9 May 2008)

propergeez said:


> You could very well see this stock tank today, again there are more sellers than buyers by a huge amount. All it will take is a few short term investors who were looking for a quick (AFG-like) buck to get nervous and start selling off cheaper.
> 
> All of the forums yesterday were hyping up the announcement and I hope everyone got out in the early morning. For all that has been said about the announcement, it was a huge disappointment and the fact that the caveats are their mean that the banks do not fully trust Centro to get through this. Thus no big investors coming in buying the shares.




 What has happened was to be expected. There were a lot of people expecting to trade this on the announcement. Most of the traders will accept whatever profit they can get and not hold out for the top price. A lot of traders would have bought in below 40c and will be boasting about their profit on the deal.

 I have personally set a target price of 60c as I believe that is what the announcement is worth and I still expect to get there in the near future even if I would have preferred it to be today.

 It is natural that the banks were tough, they take no risk and take no prisoners. The fact that the extension is there is proof to me that CNP have a future and that the banks must have faith in the management.

 Anyone expecting instant wealth today were not living in the real world.

 Slow and steady wins the race.


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## propergeez (9 May 2008)

nioka said:


> Slow and steady wins the race.




If Centro had that as their business plan in the first place then they wouldn't be in this trouble! ;-) Thus it wouldn't be a buying opportunity.


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## nioka (9 May 2008)

propergeez said:


> If Centro had that as their business plan in the first place then they wouldn't be in this trouble! ;-) Thus it wouldn't be a buying opportunity.



 Maybe they have learn't something from a very expensive exercise. The management has changed and they do have a very sound business ( apart from the financing). Basically the fundamentals are there, as I see them, for the SP to get to $1 in the short term. This is based on the company earnings, which appear to be unaffected and the probability that they will divest some of the property to pay down loans now that they have been given some time to do that. Say goodbye to dividends but the income should carry them through this torrid time. I've been wrong in the past so DYOR.


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## propergeez (9 May 2008)

nioka said:


> Maybe they have learn't something from a very expensive exercise. The management has changed and they do have a very sound business ( apart from the financing). Basically the fundamentals are there, as I see them, for the SP to get to $1 in the short term. This is based on the company earnings, which appear to be unaffected and the probability that they will divest some of the property to pay down loans now that they have been given some time to do that. Say goodbye to dividends but the income should carry them through this torrid time. I've been wrong in the past so DYOR.




A couple of the management have changed and they do have a new outlook - from expansion at all costs to survival. However they could lose a lot of their management and essential staff - who have knowledge in the company and are the ones that are managing the (unaffected) company earnings. They have lost $280M of their own money through margin loans and will be feeling quite disaffected and probably be looking for new opportunities (Westfield is expanding and have money). 

Share price down to .46 but there is support fro the rest of the day to .45 so not quite tanking - will have to wait until Monday to buy in again.


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## nioka (9 May 2008)

So far I have been wrong. I hope to correct that in the near future. It will be a little slower than I had hoped but I have not given up hope. However there are a lot of unhappy speculators lining up to sell and lowering their expectations. This morning my sell order at 60c was in 243rd place at the moment it is in the high 600s and rising by the minute. There are a lot of shares changing hands so I guess there are a lot of buyers expecting to profit in the future. As is often the case, buy pending an announcent at risk, especially if the announcement is predictable. I'm still happy to hold. I'm often wrong but I'm often right also.


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## tulasi74 (9 May 2008)

propergeez said:


> Share price down to .46 but there is support fro the rest of the day to .45 so not quite tanking - will have to wait until Monday to buy in again.




Looks like you sold today. I think I need to start selling some soon or I am going to lose my mind.  Do you mind if I ask if you use some sort of system to determine sell price, i.e. profit percentage or a percentage move in share price?

I also had another question since you have included information on platforms etc in your other posts.  Is there any way of knowing whether the volume on CNP today was day traders or whether one of the major shareholders was selling down? The newspaper reports seemed to indicate that CBA were baulking so I had a thought that maybe Colonial First State may be selling part of their stake?

Your thoughts will be greatly appreciated.

Tulasi


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## propergeez (9 May 2008)

tulasi74 said:


> Looks like you sold today. I think I need to start selling some soon or I am going to lose my mind.  Do you mind if I ask if you use some sort of system to determine sell price, i.e. profit percentage or a percentage move in share price?
> 
> I also had another question since you have included information on platforms etc in your other posts.  Is there any way of knowing whether the volume on CNP today was day traders or whether one of the major shareholders was selling down? The newspaper reports seemed to indicate that CBA were baulking so I had a thought that maybe Colonial First State may be selling part of their stake?
> 
> ...






tulasi74 said:


> Looks like you sold today. I think I need to start selling some soon or I am going to lose my mind.  Do you mind if I ask if you use some sort of system to determine sell price, i.e. profit percentage or a percentage move in share price?
> 
> I also had another question since you have included information on platforms etc in your other posts.  Is there any way of knowing whether the volume on CNP today was day traders or whether one of the major shareholders was selling down? The newspaper reports seemed to indicate that CBA were baulking so I had a thought that maybe Colonial First State may be selling part of their stake?
> 
> ...




OK, The simple version, (I could write at least a hundred pages on this)

These are my opinion's:

 There is no system on a rank outsider, lame leg, dead dog etc. There is only sentiment - Market and your own, (and forum, but never get carried away, you can learn a lot from forums but your own and market sentiment is key always!) and never goto hotcopper unless you want to be told yes I am right or no damnit I was wrong - they are all a bunch of back slapping on the UP and moaning whiney bitches on the down) and NO I don't work or am affiliated to aussiestockforums. Its just that with Aussiestockforums there is a bit of analysis, postings of announcements, and informed debate basically. Intelligence (ASF) instead of chat (HC)

So my sentiment is:

Take profits wherever you can, there was a big move on open +16%, I sold half of my CFD interest and 25% of my SSU - (standard share unit). On a profit on open. 

I did not like the announcement - it was crap. For me it told heaps, the banks wanted securitized assets in forthcoming loan structure, Centro said no and so banks put loads of conditions (and to be fair so did Centro). 

So I sold out 50%/ 25% at a profit, would have kicked myself if they had reached the heady heights of $1, BUT therein is the difference between trading and gambling, Gambling is risk it all lose it all, Trading is taking a profit where you can and not blaming yourself for not staying in and making a higher one. 

As for the platforms, even if you don't trade CFD's Forex, Gold spot etc. etc.

They are good on the news ticker, learning how the market works and for watching how many trades are coming through on the buy and the sell. Sorry no you can't tell who they are from.

Have a good weekend.


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## vida (10 May 2008)

The announcement was far from crap. It was good but measured and did not alleviate all risk. Let us not overreact.  The SP spiked and dived, so what!! profit taking is only to be expected as this stock is loaded for opportunism. 



propergeez said:


> OK, The simple version, (I could write at least a hundred pages on this)
> 
> These are my opinion's:
> 
> ...


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## mapna (10 May 2008)

In my opinion, the extension is generally a great news for CNP. It is now have more time to get a better deal of its assets. However, when you read further about terms and conditions, it is a big question mark. 

The banks used this opportunity to increase its collaterals, ensuring its loan would be paid back in full together with interest.  CNP mgt would have to work harder to please the bankers.

The extension is said to December but it is actually 30/5. Anything can happen on 30/5. If it failed the 30/5, CNP would pay extra 5% penalty on its debts calculated from 1/5.....

CNP shares have been manipulated by daytraders than big investors in the last 2 months. CBA has ceased its sub. holders about few weeks ago... (see ann. on CNP website).

I reckon CNP would be sideway or down a bit more until the last week of May when the daytraders start jump in ... IMO ... DYOR ....


Sold my at .56 on Friday. Waiting to enter again later...


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## s3081402 (10 May 2008)

Personally I hold CNP for the long run. Unless you have big money to trade CNP then it is not worth it. CNP will survived through this tough time because of their good assets. The law suit isn't a massive issues. We got a good man name GR so as long as he is able to sell some assets to reduce the debt then we will see some big investors jumping on.


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## mapna (11 May 2008)

s3081402 said:


> Personally I hold CNP for the long run. Unless you have big money to trade CNP then it is not worth it. CNP will survived through this tough time because of their good assets. The law suit isn't a massive issues. We got a good man name GR so as long as he is able to sell some assets to reduce the debt then we will see some big investors jumping on.




I am not sure how you defined as big money??? 5K, 10K or 100K but I reckon CNP is good stock to trade, the returned profit is quite high ... just looking at the last week, if anyone entered CNP at between 0.47 and 0.50, those people could have sold them at $0.555/0.56. Say average buy price was 0.49 and ave. sell price was 7cents i.e. abt 14% profit within less than one week. If you bought 20,000 shares = < 10K and you made $1,400 .. isn't it worth to trade????

30 May deadline is another major milestone for CNP. New lawsuit just came in for CNP ??? one after another for CNP which made the investor nervous about the whole picture. The SP on Friday had proven its nervousness.

I have been with CNP for a while and till love it but I can't just ignore the facts.

Again , this is my own view ... DYOR ...


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## s3081402 (11 May 2008)

mapna said:


> I am not sure how you defined as big money??? 5K, 10K or 100K but I reckon CNP is good stock to trade, the returned profit is quite high ... just looking at the last week, if anyone entered CNP at between 0.47 and 0.50, those people could have sold them at $0.555/0.56. Say average buy price was 0.49 and ave. sell price was 7cents i.e. abt 14% profit within less than one week. If you bought 20,000 shares = < 10K and you made $1,400 .. isn't it worth to trade????
> 
> 30 May deadline is another major milestone for CNP. New lawsuit just came in for CNP ??? one after another for CNP which made the investor nervous about the whole picture. The SP on Friday had proven its nervousness.
> 
> ...





The tax reason is just not worth it to trade. I have 45000 shares back when the price was 31c. I'm holding for at least 12 months. Hopefully it will go to $1+. Cheers.


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## vida (11 May 2008)

I've got holding at average .52cents and won't sell in near future. My only regret is that I didn't sell when it got to .78 cents and then didn't buy more at .23 cents, whether on way up or down I waited too long hoping for stability and missed best entry/exits. Now I will hold for min CGT by selling some in year or so when these hurdles have been cleared, SP stabilised & law suit settled. I don't think the law suit has legs.  It will reap lawyers' money but plaintiffs will walk away having caused waves but most likely without victory (litigation by the disgruntled pursuing principle often ends liked that) - possibly indemnity insurance will cover CNP's legal costs of defending .. small irritation




s3081402 said:


> The tax reason is just not worth it to trade. I have 45000 shares back when the price was 31c. I'm holding for at least 12 months. Hopefully it will go to $1+. Cheers.


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## nioka (11 May 2008)

mapna said:


> I am not sure how you defined as big money??? 5K, 10K or 100K but I reckon CNP is good stock to trade, the returned profit is quite high ... just looking at the last week, if anyone entered CNP at between 0.47 and 0.50, those people could have sold them at $0.555/0.56. Say average buy price was 0.49 and ave. sell price was 7cents i.e. abt 14% profit within less than one week. If you bought 20,000 shares = < 10K and you made $1,400 .. isn't it worth to trade????
> 
> 30 May deadline is another major milestone for CNP. New lawsuit just came in for CNP ??? one after another for CNP which made the investor nervous about the whole picture. The SP on Friday had proven its nervousness.
> 
> ...



 It is always easy to work out a good trade AFTER the event. Would you have a suggestion now how to trade them next week. They are not all that predictable.


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## mapna (11 May 2008)

nioka said:


> It is always easy to work out a good trade AFTER the event. Would you have a suggestion now how to trade them next week. They are not all that predictable.




You are 100% right in general - easy to say afterwards. But about this CNP last week, most of daytraders could predict what would happen about the extension so they entered before the ann. so they made money on the ann. day.

About next week, as I said in previous post, I personally would leave it until the last week of May to play. Next two weeks would be sideway or lower a bit... depending on the global market condition.

IMO & DYOR


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## mapna (11 May 2008)

s3081402 said:


> The tax reason is just not worth it to trade. I have 45000 shares back when the price was 31c. I'm holding for at least 12 months. Hopefully it will go to $1+. Cheers.




Understand now - we have diff view - I am a daytrader - enjoy the volatile of the market .. 

Surely it will get to $1.00 one day.

IMO


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## tulasi74 (11 May 2008)

I have been looking deeper into Centro's financials from February 2008 report to see how risky holding Centro for long term is. I have found something that I cannot explain and was hoping someone who uses this forum could explain it for me.

In their operating statement for Dec 2007, total revenues were about 255mln.  Their financing cost plus loss on derivates and foreign exchange was about 230 mln.  Their other operating expenses are about 74 mln.  So excluding asset writedowns, they potentially made a loss of 49 mln.

On page 24 of the investor presentation they have listed net property investment income of 190.9 mln, net services business income of 138.4 mln giving total EBIT of 329.3 mln.  Interest expenses is given as 125.9 mln and interest cover is 2.6 tims.  Distributable income per security is 22 cents.

I don't understand how EBIT can be 329.3 mln but total revenue according to financial statement is only 255 mln.  Does anyone have an answer?

I was sucked in by the interest cover of 2.6 times.  I have downloaded a spreadsheet of their total debt profile from their website.  This is in an excel spreadsheet and includes info on size of debt, fund that owns the debt, interest rate, whether fixed versus floating rate and maturity date.  A quick calculation of interest payable on the debt is telling me that CNP could potentially keep making losses unless they can maintain revenues but reduce their financing cost.  Please DYOR as I am a novice at all this.

Tulasi


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## sonicwind (11 May 2008)

EBIT = revenue - expense + non-operating income

Quoting from a Motley Fool article:

*"Companies have several legal options to meet estimates if they're a little bit shy in a specific quarter. Most of these strategies revolve around recording nonoperating income, earnings not derived from the core operations of the business. Examples of nonoperating income are realized gains on investments, gains from the sale of operations, interest income, and the recapture of excessive charges in prior periods."

"Nonoperating income is becoming a larger portion of the earnings stream at many companies. While this keeps net income rising, these gains aren't always sustainable and may distort earnings growth rates. You should dig deeper into the financial statements of these companies to ensure you understand the company's value."*

Someone with access to earlier CNP financial reports will be able to see how the non-operating income has been evolving.


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## Lavender689 (12 May 2008)

Hi folks,

just got back from my weekend bushwalking. trying to catch up with the news.

The interview with GR below, by Alan Kohler is very reassuring.   It is reasonable to expect such legal litigation against CNP as their chances of survival have increased dramatically after last week's event.   I don't think it is going to cause a huge stir.

Good luck.

1st part of interview: (2nd in the next post)

KGB INTERROGATION: Glenn Rufrano
The Spectators
Alan Kohler: Glenn, you’ve been in the job since February, when you were pitched into a fairly interesting situation. How are you finding it personally?

Glenn Rufrano: Well firstly, I like Melbourne! [LAUGHS] It’s a pleasant place to have moved to. My wife and I are here now and I think that’s an important backdrop actually, because the business in itself means that you better like where you’re living.

In terms of the job and the position, knowing a bit about Centro – I’d been here since last April – I expected that it would be a complicated situation. Complicated in that there are a number of lender groups and a number of lenders within the groups. Complicated because of the debt positions at either the parent company CNP, Centro Retail (CER) and the Super LLC [the vehicle for its US interests]. So I can’t tell you that on a personal level there are a whole lot of surprises on the job. The intensity has probably been greater than I thought because the co-ordination across the continents and the 14 hour or 16 hour time difference makes completion of what you think would be something easy to complete take longer. But I don’t think there are enough surprises either in the geographic move or the job itself that would disturb me.

AK: Have you learnt things about yourself that you didn’t previously know?

GR: I’m not sure. I’m 58 so I know my frailties well and whatever strengths I have. At times I’ve learnt that I have more patience than I thought and then at other times I’ve learnt I have less patience than I thought.

Robert Gottliebsen: Glenn, we’re seeing the Westfield results affected by the US downturn. How have the operating results of Centro’s US centres have been affected by that downturn?

GR: I’ll start out with just a basic understanding of the logic of our business and then I’ll answer that. We are in the shopping centre business. It’s the open air shopping centre business. Much different than Westfield. We have in the States almost 700 shopping centres, predominantly grocery oriented. I don’t think Westfield has more than 50 shopping centres in the States. So we have great diversification by geography, diversification by tenant and diversification by various formats.

I think there’s one other important factor. Shopping malls in the United States have as a large proportion of their income percentage rents which are rents based upon sales. We have virtually none of that in our smaller shopping centres in the States so we are more diversified.

Frankly, it will take longer for the consumer issues in the United States to have an impact on our economics. As of February, our occupancies were holding at about what they were in December and our non-operating incomes (NOI) were about the same. I do expect from February going forward this year we will have some occupancy decline and we’ll have some NOI decline but I don’t believe we’ll feel much of a dramatic influence because of the nature of our diversification, our locked-in leases and not as much dependence upon sales and percentage rents.

RG: Do you have to sell a portion of the US centres and how much would they have fallen below book value?

GR: Hard to say, because it’s a question of book value. In the United States we don’t have current value accounting so we’re not sensitive to book values. We think about what is the value. Values go up and values go down. Clearly values I believe have gone down from our last book value estimate. I say that even though there’s not been a lot of transactional activity.

That’s been the key issue – everybody’s guessing. I would go based upon quality of asset and cap rates and there’s an expectation that if you have an “A” quality of asset that perhaps cap rates could be higher by as much as 25 basis points. A “B” asset could be anywhere from 50 to 75 basis points. A “C” asset could be anywhere from 75 to 150 basis points higher. That would be the gradation of cap rate differential but that’s an estimate, not based on fact.

Stephen Bartholomeusz: Glenn, can we shift the focus a little bit to what happened this week. How tense were the negotiations with the banks and did you ever doubt you’d get the extension? Did you fear that Centro would be forced into administration?

GR: The logic of this situation is compelling and I think you at Business Spectator have expressed it better than anybody. The logic is that it is much better for the banks and Centro to work together longer term than not. And that logic holds as long as we at Centro are doing our jobs and managing and leasing and running the funds management business properly. I believe that logic is correct. I believe we are doing the right job. I believe the banks believe we’re the right people to run their collateral. Therefore, regardless of how tense those negotiations were, I fully believed they would be concluded.

SB: While there’s an agreement to a December 15 extension, there are intermediate checkpoints, so the banks have to agree amongst themselves for a start. Given the behaviour of a couple of them this week, are you confident they can actually come to a consensus themselves?

GR: I’d start off by saying something I mentioned before. We have three different groups with multiple players in each group. By and large, most of the players agree with the terms and conditions of the extension. We do have because of some consideration – some of them outside everybody’s control – a requirement for some time frame here, which is three weeks for the inter-creditor agreements. I think it’s an adequate amount of time. I think the logic is still compelling and I think it will happen.

SB: To get past December without the banks demanding all their money back, do you have to put some sort of substantial solution in place or would it be enough simply to have started reducing debt levels?

GR: I would say from a personal standpoint I would want to put a substantial solution in place. I think it’s the right way to proceed. This company needs to be put back on track in order to have good long-term value and I would hope and expect we would have a long term viable solution in place by December. Now, after I say that we’re always subject to market conditions and if for some reasons market conditions were such that we could not put the right long term solution in place by December we may be able to have some alternative, whatever that alternative plan would be. It could be to pay down of some debt or continue to create within the company simplification. Again, it’s only again interim step to ultimate restructuring which is the long-term solution and it would only be necessary beyond December if the markets didn’t cooperate with us.


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## Lavender689 (12 May 2008)

2nd part

RG: CNP has an asset backing of $1.31. Is that realistic given the US situation? Does it include the management contract value?

GR: The $1.31 does not. The $1.31 represents only the assets and not the services business. In terms of the US component of that, could the rise in cap rates I just mentioned to you in the US cause loss of value there? Yes. How much I’m not quite sure, but what I would also point out just in all fairness we’re certainly having in Australia a potential change of cap rates too. Around the world value has been lost in almost every asset form, although I’m not sure about commodities – you seem to do pretty well in your country here or there. [LAUGHS]. But in many cases asset values have gone down.

RG: The same thing would apply to CER with its asset backing $1.65. That also might become under pressure given what’s happening in the US and possibly Australia.

GR: Absolutely. I would say that all asset values have been under some pressure from December to today in Centro, but also in every other real estate asset holding company we’re talking about.

I don’t think that’s the most important issue. People can believe otherwise, but what really counts to me as an operator of business is not that value goes up and down. It always goes up and down. No one complains when it goes up. That’s the issue. They always complain when it goes down. But as the operator of the business I need to maintain long-term the value of the business. As long as we can continue to run those businesses properly, or run those functions within the business properly, whatever loss we will have between December and this year we’ll regain. And we’ll regain with a plus for the value added that we’ve created.

RG: What are you doing to secure that management contract business that is obviously core to the Centro exercise?

GR: The management contract business gets secured first of all by doing our job right. As long as we continue to manage and lease and develop our properties properly, that’s the number one test.

The number two test, which I know you’re talking about, with all the managed funds is how can we maintain those contracts in light of the fact people like Pelorus for instance would choose to take them from us. And the way we’re dealing with that is the way we’ve dealt with Pelorus the first time. We went to our investors. Our investors supported us. They realised that we had provided good returns. As long as we provide those I have confidence that longer term we should be able to keep the contracts.

RG: When you sell a shopping centre will you give preference to those who will keep Centro as a manager?

GR: There may be circumstances where that’s the case where we believe it’s a strategic holding for the company. There may be other cases where it’s less important.

SB: Glenn, you said you’ve said you’ve had offers for the Australian and the US wholesale funds. You’ve had offers for individual assets and you’ve had offers to recapitalise the group. How would you characterise those offers? Are they opportunistic and will the extension put you in a better negotiating position?

GR: Without a doubt the extension puts us in a better negotiating position because without a longer-term extension we are perceived as unstable. If we’re perceived as unstable, buyers will attempt to take advantage of us. There’s no doubt about that. A longer-term extension does one simple thing. It gives us stability at which point we can have a more honest conversation with buyers. In terms of portfolios versus individual assets, in markets where debt becomes more difficult – and clearly that occurred in the United States at least a year ago if not more and it’s starting to occur here – the larger the transaction the larger the potential discount to value because of the difficulty of obtaining debt.

We went through this and have been going through this in the United States and so we are finding that there may be situations whereby breaking up portfolios – such as in the case of the Centro Australia Wholesale Fund (CAWF) as we’ve announced – and selling assets to more strategic players who can provide in a more reasonable manner the debt, we may be able to get better value for the portfolio. It’s a marketing strategy which in this market which is a dearth of debt, may make more sense.

AK: Would you consider offering packages of the shopping centre assets to the existing syndicate holders?

GR: If we’ve chosen assets that we believe are disposable assets, the buying group should be whoever provides the highest price. Certainly if there is a group within the syndicates who would be the best strategic buyer and is willing to pay the highest price, absolutely.

SB: You referred a bit earlier to your desire to simplify the structure. In a broad sense, assuming Centro’s still around in 12 months or 24 months time, what would you like it to look like?

GR: The first part of simplification is not necessarily taking the managed funds and making wholesale changes. It’s trying to simplify the inter-fund investments. To me, that is the more complicated part of Centro. So what you’d like to see in 18 to 24 months would be that inter-company form of investment no longer existing. Therefore, you’re dealing with each managed fund without the conflicts of having internal investment.

AK: What about removing some of the tiers? For instance putting CNP and CER together?

GR: If I started out and just tried to create our structure visually for everyone, you’ve got CNP at the top. Then you have Centro Direct Property Fund and the Centro Direct Property Fund International in the middle, which are fund of funds. Then you have what I would call the managed funds, which are the syndicates, Centro Retail and the wholesale funds, the Centro America Fund and the CAWF. I call them managed funds because that’s where the assets are.

Folding any one or two or three of those together may make sense, depending upon the long-term viability of what results. So that if there was an instance where – and I’ll just take your example – where it made sense for CER and CNP to merge and long term you believed the value of the combined entities could do well relative to its public peer group, that may make sense. I think that before you make those simple deductions you probably have to think about the inter-fund investments before you could start combining any one, two or three of these.

RG: On the management contract business, how difficult would it be to sell off equity in that business and actually therefore pay a tangible value.

GR: Let me just define what we call here the services business because this actually was a new concept for me. Not a new concept, new phraseology coming out of the States. The services business for Centro has basically four income streams. The first one is the funds management business, which is really an income flow and therefore value is based upon the ability to access capital and create products from retail real estate from that capital. So that’s the funds management piece. Then the last three – management, leasing and development – are income streams based upon your ability to manage lease and develop real estate assets, in this case retail in two countries.

So there are very different disciplines, very different functions, very different talents. All very valuable. It’s all called the services business. Four different pieces.

Now to get to the question, could you monetise those? I’d say you could. You could have someone who is interested in the funds management piece – the access to capital and product creation. And then there could be someone interested in the property management piece – the management, leasing and development.

.


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## Lavender689 (12 May 2008)

3rd bit


Just a suggestion, Shall we increase the post size limit?  It seems too small for this post, and oftentimes it takes time to cut and paste it into a word doc to do the counting.

Would the administrator pls kindly consider?

Thanks, L


-And then there could be someone who was interested in the entire spectrum. If you control all the funds management and property management, it’s easier to control the income flows, which is really the basis for Centro. If you have the funds management business and control access to capital and products, you have the better means of controlling the contracts back at the management, leasing and development level.

The probability therefore is that most parties that have an interest would probably have an interest in all four streams. So that there can be a level of control and durability and probability to those streams long-term, and that would allow us to have the highest price. Those considerations have been made at the company level and at some point could be entertained as part of the capitalisation of the company or recapitalisation of the company.

RG: In book value terms, the management business is basically a bonus, isn’t it?

GR: That’s exactly right. It’s over and above. Now, in our balance sheet we have extracted the management business from the $1.30 but we also have an intangible number. The intangible number is goodwill and it’s about $1.7 billion as of December.

RG: Is that realistic or is it worth more than that?

GR: On February 29 we had our call to the market, where we introduced the December numbers and question came out about the value of the business. In order to establish the value of the intangibles on the balance sheet from an accounting standpoint, the company has to give an indication of what it believes the value of the services business is. We did give you that indication and we announced on February 29 that the company thought it was about $3 billion. And that was down substantially. If you remember well before I got here, there was an outside valuation done of KPMG, I believe in early 2007 or late 2006 of $5.5 billion.

SB: Are you now more confident as a result of the events of this week that when this process is over there will be something meaningful left for the equity holders?

GR: I’ve been fairly confident of that all along as long as we had the time to execute and if our financing group allowed us to have the stability to execute our plan. I believe what happened this week puts us one notch higher in that probability.

SB: Glenn, thanks very much indeed for your time and we wish you the best of luck
-------------


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## mihamilton (12 May 2008)

Any lawyers here? Can some1 analyze the odds that CNP can win the case against IMF? 

As far as I know, as long as CNP can prove that it has complied with ASX listing rule 3.1, it would be fine. Namely

3.1A.1 reasonable person would not expect 
3.1A.3 incomplete info/negotiation 


am I right????


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## mapna (12 May 2008)

Reckon CNP hit the support line today, good buying support @.395/.40 ... it would be volatiled for next few days then ready for the push up before 30/5. IMO


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## Lavender689 (12 May 2008)

Just to toss ideas around.

I am not a lawyer but a logical person.

I think one thing is that, even though there were some issues with their disclosure, it may be yet to prove that there is a direct link between the non/inappropriate-disclosure and the losses suffered by the shareholders.

It may well be that the direct link does not stand. SP fall was aggravated by the credit crunch caused by the US sub-prime mortgage crisis.

ANyone has any idea?

Thanks, L


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## mihamilton (12 May 2008)

Personally, I think it will depend on whether the fed judge(s) consider centro's "non-disclosure" as exceptions under ASX listing rule 3.1A.1incomplete info or 3.1A.3 reasonable person. Centro may have evidence for the first condition. but for the 2nd condition, reasonable person, IMF may convince the judge. I think( not sure if it's rite) centro may take this down to civil remedy-director's duties, and therefore bring up Andrew Scott and the former CFO/accountant/auditors, trying to prove that they have appropriately delegated their power to certain candidates based on a reasonable person's standard. The worst, scenario would be former officers are liable for the breach of their duties.

Not sure it's rite. Just personal opinions


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## nioka (12 May 2008)

In a case like this there are a lot of desperate people who would like to pass on the blame and try to get some compensation. There is also a group of legal eagles looking for someone to fund their lifestyle who will find anything that is in any way likely to help their cause. I would be surprised if they have much of a case against CNP. I think it will get passed over easy. In the meantime it does not help the SP which is suffering a minor lemming rush as speculating dealers exit positions. Let the dust settle and I, for one, am counting on an SP increase. Anytime a share price falls more than 3% or more the sell triggers cause the lemmings to sit up and get active.


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## tulasi74 (12 May 2008)

I would like to thank Lavender fo posting the interview with Glenn Rufrano.  Great to get an insight from the man at the top!!

I would also like to thank SonicWind for his explanation of EBIT.  I am still concerned but the interview with GR is a bit reassuring on Centro's current position.

In relation to the litigation, the credit crunch exacerbated the misclassifying of short term liabilities as long term liabilities.  While people first became aware of the credit crunch in August last year, its full impact was not felt until November so IMO it might be a hard one for shareholders to win in terms of proving that their decision making was impaired. But CNP may be penalised for the non-disclosure? I am concerned how much it will cost the company in litigation costs.  Does anyone have an idea on whether companies generallyhave indemnity insurance to cover litigation costs for situations like this?


Tulasi


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## Lavender689 (12 May 2008)

Hi Tulasi,

That's OK. The interview was very good, and I personally do have a lot of confidence in Glen R. He seems to have a lot of very good qualities for a leader - decisive and tenacious, astute and flexible negotiator with banks, etc. He certainly has worked very hard and done a great job so far. 
This gave the shareholders and the lenders a lot of confidence.

I don't think May 30 is really another timeline for CNP, rather it is just for finalising documentation.  With regard to the liquidity line, I reckon, it is just part of the deal, it will definitely happen, if the local banks do not provide, we would most probably expect banks like JP Morgan and Bank of Amercia to intervent or provide such lines at reasonable conditions themselves.

The key thing here is that the banks (most of them) and CNP are now in the same boat in the remote ocean and they need to help each other to survive and land at the bank. 

The IMF guys are just opportunists taking advantage of the situation. 
In a way, the litigation happening now is actually a positive sign, i.e. the company will survive and have something to pay if the claims are legally recongisable/enforceable.  This is why it happened just after the debt extension announcement. Assuming IMF is not misrepresenting and there are really a large number of institutional investors joining the litigation, they made such decision only when they saw CNP's chances of survival are high.

In view of this, and also that it is quite likely that the directors and the accountants (in particular) would be liable for the classification of ST borrowings under non-current liabs, their professional indemnity insurance will be used for the claims, if these people are really liable. 

On the other side, when it comes to the shareholders' losses, there is not an entirely direct link between the accounting misrepresentations and their losses.  The credit crunch actually excerbated the situation and led to the huge losses of shareholders. 

Hence, whilst the litigation may cost CNP financial and legal resources, the actual legitimate claims amount is not likely to be over AUD100mln as IMF guys have claimed. 

Also, assuming that at least some of the shareholders (individual or institutional) are still holding the shares, they will also be working smartly with the IMF guys and make sure that the timing of any announcements is appropriately selected not to cause too much swings to the share price. 

I suppose, after seeing the share price swings last Friday and today, these shareholders and their attorney will be more mindful of the timing, within th e realms of ASX legal compliance from IMF's prospective.   There should be a more balanced approach as to how they handle the case. 


In short, I see the bigger picture as being CNP debt reduction/recapitalisation with the support of the banks.  the litigation may dampen share price rise in the short term, but it is not going to reverse the overall positive direction CNP is leading to. The litigation itself also evidenced the investors' view that CNP will survive. Besides, the likely amount, even if in the worse case scenario (i.e. CNP/directors are liable) is not likely to be the amount IMF claimed.  The inflated AUD100mln or above claims is also not that significant in the whole scheme of things.


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## propergeez (13 May 2008)

mapna said:


> You are 100% right in general - easy to say afterwards. But about this CNP last week, most of daytraders could predict what would happen about the extension so they entered before the ann. so they made money on the ann. day.
> 
> About next week, as I said in previous post, I personally would leave it until the last week of May to play. Next two weeks would be sideway or lower a bit... depending on the global market condition.
> 
> IMO & DYOR




I am wondering when to get back in, Mondays expected drop wasn't as big as I was anticipating. I thought that once it had got into the .3's it would drop substantially. Today has been a rather dithering day and it does look like it will continue on a gradual decline. Question is will it get down to the .2's?


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## mapna (13 May 2008)

propergeez said:


> I am wondering when to get back in, Mondays expected drop wasn't as big as I was anticipating. I thought that once it had got into the .3's it would drop substantially. Today has been a rather dithering day and it does look like it will continue on a gradual decline. Question is will it get down to the .2's?




The last 2 days showing it gets a good support at @0.375/0.38. It looks like more daytraders buying and selling than real investors. If there is no real investor selling means the SP would not drop too far. Looking at the chart, if it open higher tomorrow then the Boll. indicator would indicate the bottom has hit, ready for resersal.

I still reckon it would be sideway for the rest of the week. Next week would start some action until 29/05 (before the next ann.).

It might go back to where it was before last ann., if 30/5 ann. as expected  then shareholders would be laughing .....

again - This is my personal view only - DYOR ....

Be patient ... will get there ...


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## wilko66 (14 May 2008)

Seems Centro has made the first of the previously outlined property sales (Southport).  

Price of $75 million represents book value and is noted as "good sign" for local mkt buoyancy.   Proceeds to pay down debt (surprise.)

Full article in AFR and precis on Business Spectator.

I believe its not fully finalised but seems a good start.


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## Lavender689 (14 May 2008)

Good News.

See the article below, retail property price strongly co-relates to retail sales.
This is very positve for CNP's asset sale/debt reduction process. 
Also, remember that their properties are mainly for non-discretionary goods retailing.

----------------

US retail sales resilient

Email Print Normal font Large font AdvertisementMay 14, 2008 - 7:22AM 
Page 1 of 2 
US retail sales excluding cars were surprisingly strong in April, showing consumers still willing to add spending punch to the economy despite soaring food and energy prices, a government report showed.

The report echoed recent data implying underlying economic durability, including fewer job losses in April than feared and a surprisingly strong pace of first-quarter productivity that buoys hope for corporate profits.

The Commerce Department said retail sales declined 0.2% but excluding cars, sales rose 0.5%. Economists expected total sales to slip 0.1%, but had forecast just a 0.2% gain outside of autos.

''I think it's a report that tells you the economy is very weak, but if we are in a recession it's going to be a real short one,'' said Robert MacIntosh, chief economist at Eaton Vance in Boston.

Analysts hope consumer spending will cushion an economic slowdown and offset the dampening impact of falling housing prices, particularly with an added boost coming from government rebate checks being sent to about 130 million taxpayers under a stimulus plan.

The economy is forecast to grow at a scant 0.2% annual rate in the second quarter, slowing from the anemic 0.6% growth rate in the previous two quarters, according survey of economists released by the Philadelphia Federal Reserve Bank on Tuesday.

The retail sales data boosted the dollar's value by supporting a view the US Federal Reserve may keep official interest rates on hold. But US Treasury debt prices, which tend to benefit from lower rates, lost ground.

Stock prices were whipsawed throughout the trading session. They were buoyed initially by the retail sales data but suffered later after a bevy of Fed speakers warned that markets remain unsettled and inflation was still a threat.

The Dow Jones industrial average fell moderately by 44.13 points to end at 12,832.18. But the Nasdaq Composite Index closed up 6.63 points at 2495.12.

On the Sydney Futures exchange, the June share price index futures contract was down 2 points to 5842. The Australian dollar was trading at 94.11 US cents compared to 94.22 late yesterday.

Other data highlighted the squeeze on consumers, who have caught between rising food and energy prices and a crumbling housing market.

The Labor Department said US import prices climbed 1.8% in April as prices for petroleum and non-petroleum products climbed, feeding worries about the potential for inflation.



Import prices have jumped 15.4% over the past year, the biggest 12-month gain since the government began publishing the data more than a quarter century ago.

Separately, the National Association of Realtors said median values of existing single-family homes in metropolitan areas fell 7.7% from levels a year ago.

The Federal Reserve has cut official interest rates 3-1/4 percentage points to 2% since mid-September to shield the economy from a credit crunch sparked by the housing crisis, hoping to keep consumers from choking off the spending that fuels two-thirds of US economic activity.

Fed Chairman Ben Bernanke, speaking by teleconference to a Federal Reserve Bank of Atlanta conference in Sea Island, Georgia, cautioned that strains remain in the nation's financial markets.

Analysts said the retails sales numbers might increase chances that Fed policy-makers will pause their rate-cutting campaign and focus more closely on controlling inflation.

''Overall, this supports the view that the Fed will hold interest rates for the next two to three (policy) meetings,'' said Ron Simpson, director of currency strategy for Action Economics in Tampa, Florida.

In April, sales of building materials gained 1.9%, more than reversing March's 1.5% fall. General merchandise store sales were up 0.5%, well ahead of March's 0.1% rise.

Lofty gasoline prices have pinched consumers' pocketbooks and reduced their interest in new cars.

Auto dealers suffered a 2.8% drop in sales during April, adding to the 0.5% decline posted in March. Gasoline stations reported a 0.4% decline in April sales after a 1.6% rise in March.

The new level of cost consciousness turned up in operating results for Wal-Mart Stores, which rose 7% in the quarter ended April 30. The largest US retailer noted its customers were seeking bargains on necessities such as food and were straining from paycheck to paycheck.

''Even if food prices are inflating these figures a bit, consumers still appear prepared to keep spending as long as deals can be had and Uncle Sam foots some of the bill,'' said Michael Gregory, an analyst with BMO Capital Markets.

Reuters


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## Lavender689 (14 May 2008)

Full AFR article from another forum

-
Source: The Australian Financial Review newspaper [Page 56 - Property]
Wednesday 14 May 2008

Centro to sell Southport mall for $75m
Mathew Dunckley and Paddy Manning

Key Points


The sale price is in line with the most recent book valuation.

Developer Norm Rix says his bid was knocked back last week.

Other properties on Centro's books are seen as more desirable.

Analysts said the price paid was encouraging for the sector.

The break-up of Centro Property Group's Australian shopping centre portfolio has begun in earnest with the disposal of Centro Southport on the Gold Coast for about $75 million.

The sale of the Southport, owned 50-50 by the Centro Retail Trust and the Centro Australian Wholesale Fund (CAWF), was mentioned in a lengthy disclosure document posted with the US Securities and Exchange Commission overnight about the group's recent debt-extension arrangements.

"Management of Centro has received an offer for the purchase of Southport Centre for approximately $75 million," the document said.

"Centro now desires to enter into an agreement of sale with a potential buyer ... and to apply the proceeds of such sale to repay certain credit facilities of Centro Retail Trust and CAWF."

Yesterday, a Centro spokesman declined to comment on the details of the potential transaction, saying it had not been finalised. Its lead real estate advisor JLL's Simon Rooney, was not available for comment.

The 19,279 square metre Southport centre is about 80 kilometres south of Brisbane and is anchored by a discount department store and two supermarkets..

The 24-year-old centre was extended in 2005 to add an Aldi supermarket.

At $75 million, the sale of Southport was exactly in line with the most recent book valuation provided by the company last year, equating to a yield of about 6.25 per cent.

Private Gold Coast-based-developer Norm Rix said yesterday he had expressed interest in buying Southport last week but was not given the opportunity to bid and was told yesterday the centre had been sold by Centro.

Mr Rix's company, Rix Developments, owns substantial land and property assets in and around the Gold Coast region and was believed to have been a cash buyer for Southport.

"Whether I'd pay that price or not I don't know. However, I was never given the opportunity to even investigate the matter further. Perhaps I would've paid more.

"Apparently, there's a bit of cherry-picking going on to those in the know. I believe my money is as good as anybody's and I was never given the opportunity.

The property industry is awash with rumours about Centro's sell-down and there was speculation yesterday that the Nerang River Plaza, worth more than $50 million, might also be close to changing hands.

While 100 per cent interests in some smaller centres are being offered, Centro is believed to be offering a scaled-down version of the CAWF portfolio to institutional and offsore investors.

The scaled-down portfolio comprises half a dozen assets worth more than $1 billion, being offered as half-interests subject to continuing Centro management rights.

One industry source said Centro faced a difficult choice: selling off the best assets made a portfolio sale less likely, while market conditions made a sale of lesser assets almost impossible. 

The source said Centro Galleria in Perth, The Glen in Melbourne and Centro Mandurah in Western Australia were "the ones everyone wants", and had the best growth profiles.

But recent reports indicated those centres had been withdrawn from sale.

The rest of the CAWF portfolio represented second, third or fourth-tier assets, the source said.

"We're in a tough market. We're not going to do ourselves or any investors any favours by paying book value.

"It's a different story on the quality properties, but if you go and look at some of the real estate, it hasn't been that well managed," he said.

Property analysts said the price for Southport was encouraging for the sector and provided further evidence of the resilience in the global market.


Shopping Spree
Centro Australia Wholesale Fund Portfolio

Centro Galleria - Valued at $585m 
[GLA: 72,484m2; Owned 50% with CER]

Centro Bankstown - Valued at $580m
[GLA: 80,999m2; Owned 50% with CMCS 28]

Centro The Glen - Valued at $413.80m
[GLA: 58,395m2; Owned 50% with CER]

Centro Colonnades - Valued at $370m
[GLA: 64,557m2; Owned 50% with CER]

Centro Roselands - Valued at $350m
[GLA: 61,679m2; Owned 50% with CMCS 21]

Centro Toombul - Valued at $270m
[GLA: 48,468m2; Owned 50% with CER]

Centro Mandurah - Valued at $233.60m
[GLA: 39,564m2; Owned 50% with CER]

Centro Karingal - Valued at $214m
[GLA: 41,335m2; Owned 50% with CER]

Centro Warriewood - Valued at $150m
[GLA: 22,155m2; Owned 50% with CER]

Centro Arndale - Valued at $151,60m
[GLA: 40,186m2; Owned 50% with CMCS 33]

Centro Cranbourne - Valued at $136.20m
[GLA: 33,872m2; Owned 50% with CER]

Centro Warwick - Valued at $136m
[GLA: 30,202m2; Owned 50% with CER]

Centro Mildura - Valued at $110.70m
[GLA: 19,695m2; Owned 50% with CER]

Centro Tweed - Valued at $110.80m
[GLA: 18,653m2; Owned 50% with CER]

Centro Box Hill South - Valued at $107.40m
[GLA: 23,753m2; Owned 50% with CER]

Centro Taigum - Valued at $90.80m
[GLA: 22,122m2; Owned 50% with CER]

Centro Box Hill North (Whitehorse) - Valued at $78.80m
[GLA: 14,202m2; Owned 50% with CER]

Centro Lavington - Valued at $76.60m
[GLA: 19,155m2; Owned 50% with CER]

Centro Southport - Valued at $75m
[GLA: 19,299m2; Owned 50% with CER]

Centro Karratha - Valued at $72.20m
[GLA: 23,601m2; Owned 50% with CMCS 25]

Centro Goulburn - Valued at $70m
[GLA: 13,917m2; Owned 50% with CER]

Centro Springwood - Valued at $63m 
[GLA: 15,490m2; Owned 50% with CER]

Centro Mornington - Valued at $62.58m
[GLA: 11,669m2; Owned 50% with CER]

Centro Whitsunday - Valued at $60.60m 
[GLA: 21,723m2; Owned 50% with CER]

Centro Halls Head - Valued at $29.20m
[GLA: 6,037m2; Owned 50% with CER]

Note: The above does not include Centro Tuggeranong, Victoria Gardens or Hervey Bay which are held in joint ventures.

[Source: Centro]


Ends. (Phew; just as well it's first thing in the morning crew, otherwise this might have taken me hours to type out - lol)


----------



## nioka (14 May 2008)

If sales of property can be made at reasonable prices AND CNP keep management rights then there will be good value left for CNP holders. The management rights are where the income comes from. If a couple of sales can be made like this I can see my 60c SP following quickly behind those sales. That's my opinion.


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## cnpwellwisher (15 May 2008)

Has anyone got the guess why the SP is going on falling since last 4 days.... I thought it would stop around 0.38 but today it reached a new low of 0.34 after along time.... Moreover there are no news or announcement then why is the SP constanly falling????? 
CER isnt as volatile as CNP.


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## gensis1 (15 May 2008)

Probably because of staff resignations...afr article today. They have had a week of bad news with law suit,analysts' poor review of the extension,and now this,not to mention the short sellers magnifying all this...hopefully they'll recover ground when they make a decision on CAF offer and other(bigger) asset sales are annouced.


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## cnpwellwisher (16 May 2008)

Today was a good day for CNP. Initially it went 1.5 cents down but at the end of the day gained 2.5 cents from previous closing. I think the day traders have nothing to sell now. The one remaining in the league are the real investor with a long term investment strategy. After 30th may the SP might catch some pace and reach towards 0.50 and above. This is just my personal feeling. I think in coming days they might make some big and price sensitive announcement which will see the SP rising.


----------



## Birdster (16 May 2008)

cnpwellwisher said:


> ... After 30th may the SP might catch some pace and reach towards 0.50 and above. This is just my personal feeling. I think in coming days they might make some big and price sensitive announcement which will see the SP rising.





Of course you would with a name like "cnpwellwisher" and only three posts. 

Does your cousin, nslwellwisher, got any remarks on NSL? 

Really...


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## Lavender689 (17 May 2008)

Birdster,

You sound a bit sarcastic.

I think CNPwellwisher has just made a fair comment/opinion on his/her expectation of the CNP share price.   There is nothing wrong with that.

I bet most people here, especially those that have incurred losses on this stock would hope sp to go up, which is a reasonable expectation. This is given 

(1). the fact of the sound fundamentals of the business (evidenced by the not too bad US results);

(2). the confidence in the new CEO;

(3) the banks (mostly unsecured) are in the same boat as shareholders;i.e. the May 30 deadline is more likely than not just a time to finalise legal documentation, no big drama is expected. 

(4). the recent property sale at above book value prices and the strong interests from bidders; and 

(5). the fact that the shares have been dramatically oversold lately by daytraders. 

Such solid fundamentals/factors would well outweigh all the short-term negativities /noises (staff resignations, class action litigation/May 27 hearing).

I guess we will just have to be patient, and be more alert to the new developments over the next two weeks at least. 


I do hope that people on the forum could more vigorously keep each other informed/updated of any new development, or any observations in major sp movements. 

IMO, the forum is a place for people to exchange ideas/opinions, and share information that are beneficial to the members not just financially but also intellectually. 


The above is just my view. I have no intention to hurt anyone here. 

Thank you very much. 

L


----------



## Birdster (17 May 2008)

You're right Lav,

it was a bit sarcastic...apols to cnpwellwisher.

I was thinking and typing two seperate things!
Good food and wine can do that you know. 

What I was meaning to ask is why 30th May was when the price is to go .50 cents. (Other than "personal feeling") The deadline does not seem to be a price sensitive issue. Selling off of RE is though, but in a possible negative way.

So one question is; Why do you think 30th May is worth +13.5 cents?

Also, predicting an ann in the near future will see the SP rise is to what thought? Or is it well wishing?

Thanks for the reply.

Birdster


----------



## redandgreen (17 May 2008)

Congratulations Lavender ..very good post

You have touched on all the important considerations for CNP holders.

I share your view that the next few weeks should be good for the longer term investor.

I have a large parcel of CNP shares so am clearly biassed. 

I can see the light at the end of the tunnel  and IT IS NOT A TRAIN ( though the media would have it otherwise) 

GL to  all holders, looking forward to next week.


----------



## MU002 (17 May 2008)

I have been trading shares for just 2 month. My background is accounting and business. Personally, I dont like gamble. I believe trading share is all about valuation. At the beginning, I bought major banks shares at their recent lowest in middle March. But after I heard centro and read through all posts in this forum, I sold out all my banks and buy up to 1.6 million cnp shares around 30c cost. The reasons are same as mentioned above. I prepared to take the loss if there is a fire sale. I dont think I will be left zero  in the end (scared though during the price down to 26c). After cnp share recovered to 50c level, I trade 20% of my cnp daily to take advantage of the price fluctuation. Before the recent ann, I sold all my cnp at around 47.5 c, not a maximum of profit, but still feel lucky not hold too much for too long.

Really thanks for people provide valuable info on this forum, I even check this forum before I check everyday news. I buy some cnp and cer again after the ann, and feel cer is better for short term hold. Although I dont feel like to buy that much cnps as before, I still fully trust centro is undervalued. All the troubles now goes to the banks. I reduce my centro holdings because I cant expect any dividend distribution in the near future.


----------



## Joe Blow (17 May 2008)

cnpwellwisher said:


> Today was a good day for CNP. Initially it went 1.5 cents down but at the end of the day gained 2.5 cents from previous closing. I think the day traders have nothing to sell now. The one remaining in the league are the real investor with a long term investment strategy. After 30th may the SP might catch some pace and reach towards 0.50 and above. This is just my personal feeling. I think in coming days they might make some big and price sensitive announcement which will see the SP rising.




cnpwellwisher,

Just a couple of points:

1. You may have a "personal feeling" that the price will "reach towards 0.50c and above" but on ASF personal feelings are not considered to be sufficient evidence of any particular point of view. We need something some more substantial such as some analysis that others can critique.

2. If you think that in coming days "they might make some big and price sensitive announcement which will see the SP rising." you will need to explain in detail why you believe this to be the case. Otherwise it is considered ramping and would be subject to removal from the forums.

Something to consider before posting again.


----------



## vida (17 May 2008)

I agree with you Lavender.  I think the media are making too much of staff resignations (when have they broadcast manager resignations at other companies - unheard of before I would think) Directors comings and goings newsworthy but mere leasing managers who probably had offers they couldn't refuse made by companies head hunting and scoring the more vulnerable and opportunistic, fair enuff & good luck to them. The media is sensationalising trivia when they have nothing else to report.

The hearing on 27 May is a directions hearing nothing more, when the parties with court approval will outline timelines for the whole process, defences, affidavits, requests for discovery and particulars of claim, mediation dates etc The litigation process could take ages and a reasonable commercially viable agreement to settle may be agreed before it ever gets to court. CNP could well be on its way to recovery before the litigation gets that far and plaintiffs could back off and settle up early - who knows what will happen as we have not heard CNP's defence yet.

I think its hard to accurately predict what will happen but CNP is in a gradually strenghthening position backed by the banks and the general market is showing a glimpse of recovery so it is not a bad outlook at all. The litigators are backed by a big fund but with many conditions underlying that which we know nothing of, and the litigation could all fall through before long. The lawyers are taking the case because that's their job and not because they have a case they can definitely win.

I don't feel over confident as there is  much uncertainty but I am ready on reasonable commercially logical grounds to hold and be patient with this and trust in Rufrano and his team to not have wasted all their hard work to now.  




Lavender689 said:


> Birdster,
> 
> You sound a bit sarcastic.
> 
> ...


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## gensis1 (17 May 2008)

I think may30 is a very significant steping stone for centro,because the conditions the banks have set for cnp/cer maybe,more than likely,resolved...(or extended again),which shows to me that after all the extensions centro have had in the past,the banks are unlikely to close on them in the near future,(clear for 4months sept30),and actually,providing their operations are still strong,will give them even more support.(hey the banks have gone this far).
news today in afr article:'centro warns on accounts'


----------



## Lavender689 (17 May 2008)

See the following article from AFR, Not sure about the timing of the issue that the accounts can not be trusted.  Anyone has any idea?  

They seem to be mainly balance sheet related/non-cash P &L items.

The positive thing is the 9.5% US rental income growth, despite rising non-cash depreciation charges.
---------------
"The most recent accounts detailing rising expenses, linked primarily to depreciation allowances, leading Centro NP LLC to post a loss of $US6.8 million ($7.3 million) compared with a profit of $US27.4 million for the same period in the previous year.

In some good news, Centro said rental income for the portfolio was up 9.5 per cent to $US96.2 million from the same quarter in 2007."

------------------

Source: The Weekend Australian Financial Review newspaper [Page 15]
May 17-18, 2008

Centro warns on accounts
Report: Mathew Dunckley
________________________________________________________________

KEY POINTS


Centro revealed a $3.9 billion funding shortfall in December.


That sent its share price diving from $5.70 to as low as 23.5c.


Its US subsidiary reported rising costs but better rental income.

________________________________________________________________


Centro Properties Group has been forced to admit that its accounts cannot be trusted, as it battles to regain investor confidence.

In startling admissions contained in the first-quarter accounts for its Centro NP LLC subsidiary, filed with the US Securities and Exchange Commission, Centro confessed that its own public statements about its financial position were unreliable.

"We identified material weaknesses in connection with our internal controls over financial reporting that, unless remedied, could have a material adverse effect on our external financial reporting," it said, adding that the situation had not been fixed by the end of the quarter.

"With a failure to achieve and maintain effective internal control over financial reporting, there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis."

Centro has been living at the mercy of its banks since revealing a $3.9 billion funding shortfall in December that sent the company's share price diving from $5.70 to as low as 23.5c.

Angry investors have mounted a class action alleging inadequate disclosure about the company's debt position.

Centro first admitted to its reporting shortcomings in its December 31 accounts, also filed in the US, and flagged problems with disclosure in its operations, accounting and legal functions. 

In particular, there were issues in the bedding down of Centro's complex $US5 billion takeover of New Plan Excel Realty Trust.

As previously reported, Centro said it had also had difficulties with its accounting of asset impairment, which resulted in an incorrect reporting of the company's intangible assets. 

A corrected version was subsequently issued showing an additional $US77.7 million impairment charge on intangible assets. 

Centro's intangible assets were correctly stated in Australia in its half-year result in February.

In the statement, the company said that while its processes might have caused concern it had still managed to produce accurate numbers.

"While this material weakness did not result in any improper accounting by us, management is committed to remedying the deficiency," it said.

It is understood the company included the references to the 'material weakness' at the insistence of its auditor PricewaterhouseCoopers.

A spokesman for the Australian Securities Exchange said the regulator had reviewed the statement and discussed the matter with Centro.

Because the filing applied to an entity that was not listed on the ASX, it was not subject to its disclosure rules.

"The ASX has reminded Centro of its obligations under the rules," the spokesman said. "The company believes that the SEC filing does not affect the integrity of the information given to the local market."

The most recent accounts detailing rising expenses, linked primarily to depreciation allowances, leading Centro NP LLC to post a loss of $US6.8 million ($7.3 million) compared with a profit of $US27.4 million for the same period in the previous year.

In some good news, Centro said rental income for the portfolio was up 9.5 per cent to $US96.2 million from the same quarter in 2007.

That figure was boosted by new acquisitions ($US6.4 million) and a change in the accounting treatment of below market leases (worth $US11.1 million).

Elsewhere in the accounts, there was a reference to the need to pay out unit holders from an existing New Plan deal at a cost of about $US37.2 million by June 27. 

During the first three months of 2008, the company also sold a shopping centre and a parcel of land reaping about $US9.6 million.

An Australian Securities and Investments Commission spokeswoman said Centro had continuous disclosure obligations but would not comment on whether it had met them.

Centro shares rose 2.5c to 36.5c on Friday, after a tough week.


Ends.


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## Lavender689 (17 May 2008)

Excerpts of an AFR article re cheap takeover targets

CitiGroup reckons a takeover premium of 860% for CNP (36.5c last Friday close)

Apparently, CNP, the high profile victim of credit crunch caused by US sub-prime mortgage crisis is massively undervalued at the moment. 

----------------

Source: The Weekend Australian Financial Review - Perspective [Page 21]
May 17-18, 2008

Takeover candidates
Companies that are looking cheaper (assuming 8.5% pre-tax cost of debt)
______________________________________________________________

Company: Allco Finance Group
Industry: Diversified Financials
Shares (millions): 368
Market cap ($m) (1): 156
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 13
FY09e pretax earnings after interest costs (4m) (3): 150
Takeover premium payable (%) (4)=(3)/(2)-1: 1028
______________________________________________________________

Company: Centro Properties Group
Industry: Real Estate
Shares (millions): 845
Market cap ($m) (1): 401
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 34
FY09e pretax earnings after interest costs (4m) (3): 328
Takeover premium payable (%) (4)=(3)/(2)-1: 860
______________________________________________________________

Company: Challenger FSG
Industry: Diversified Financials
Shares (millions): 615
Market cap ($m) (1): 1280
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 109
FY09e pretax earnings after interest costs (4m) (3): 330
Takeover premium payable (%) (4)=(3)/(2)-1: 203
______________________________________________________________

Company: Babcock & Brown
Industry: Diversified Financials
Shares (millions): 370
Market cap ($m) (1): 4753
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 404
FY09e pretax earnings after interest costs (4m) (3): 1106
Takeover premium payable (%) (4)=(3)/(2)-1: 174
______________________________________________________________

Company: Oxiana
Industry: Materials
Shares (millions): 1549
Market cap ($m) (1): 4865
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 414
FY09e pretax earnings after interest costs (4m) (3): 1066
Takeover premium payable (%) (4)=(3)/(2)-1: 158
______________________________________________________________

Company: Qantas Airways
Industry: Transport
Shares (millions): 1790
Market cap ($m) (1): 6390
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 543
FY09e pretax earnings after interest costs (4m) (3): 1360
Takeover premium payable (%) (4)=(3)/(2)-1: 150
______________________________________________________________

Company: ABC Learning Centres
Industry: Consumer services
Shares (millions): 475
Market cap ($m) (1): 679
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 58
FY09e pretax earnings after interest costs (4m) (3): 129
Takeover premium payable (%) (4)=(3)/(2)-1: 124
______________________________________________________________

Company: Caltex Australia
Industry: Energy
Shares (millions): 270
Market cap ($m) (1): 3588
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 305
FY09e pretax earnings after interest costs (4m) (3): 569
Takeover premium payable (%) (4)=(3)/(2)-1: 87
______________________________________________________________

Company: Suncorp
Industry: Insurance
Shares (millions): 957
Market cap ($m) (1): 12488
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 1061
FY09e pretax earnings after interest costs (4m) (3): 1958
Takeover premium payable (%) (4)=(3)/(2)-1: 84
______________________________________________________________

Company: Valad Property Group
Industry: Real Estate
Shares (millions): 1524
Market cap ($m) (1): 1204
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 102
FY09e pretax earnings after interest costs (4m) (3): 189
Takeover premium payable (%) (4)=(3)/(2)-1: 84
______________________________________________________________

Company: ANZ
Industry: Banks
Shares (millions): 1954
Market cap ($m) (1): 39967
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 3397
FY09e pretax earnings after interest costs (4m) (3): 6083
Takeover premium payable (%) (4)=(3)/(2)-1: 79
______________________________________________________________

Company: WorleyParsons
Industry: Energy
Shares (millions): 121
Market cap ($m) (1): 4278
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 364
FY09e pretax earnings after interest costs (4m) (3): 642
Takeover premium payable (%) (4)=(3)/(2)-1: 77
______________________________________________________________

Company: Macquarie Group
Industry: Diversified Financials
Shares (millions): 274
Market cap ($m) (1): 15158
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 1288
FY09e pretax earnings after interest costs (4m) (3): 2248
Takeover premium payable (%) (4)=(3)/(2)-1: 74
______________________________________________________________

Company: St George Bank
Industry: Banks
Shares (millions): 534
Market cap ($m) (1): 12993
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 1104
FY09e pretax earnings after interest costs (4m) (3): 1925
Takeover premium payable (%) (4)=(3)/(2)-1: 74
______________________________________________________________

Company: National Australia Bank
Industry: Banks
Shares (millions): 1619
Market cap ($m) (1): 46814
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 3979
FY09e pretax earnings after interest costs (4m) (3): 6831
Takeover premium payable (%) (4)=(3)/(2)-1: 72
______________________________________________________________

Company: Westpac
Industry: Banks
Shares (millions): 1824
Market cap ($m) (1): 41190
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 3501
FY09e pretax earnings after interest costs (4m) (3): 5693
Takeover premium payable (%) (4)=(3)/(2)-1: 63
______________________________________________________________

Company: Tabcorp
Industry: Consumer services
Shares (millions): 525
Market cap ($m) (1): 5532
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 470
FY09e pretax earnings after interest costs (4m) (3): 749
Takeover premium payable (%) (4)=(3)/(2)-1: 59
______________________________________________________________

Company: Goodman Fielder
Industry: Food, beverage & tobacco
Shares (millions): 1325
Market cap ($m) (1): 2286
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 194
FY09e pretax earnings after interest costs (4m) (3): 309
Takeover premium payable (%) (4)=(3)/(2)-1: 59
______________________________________________________________

Company: QBE Insurance
Industry: Insurance
Shares (millions): 895
Market cap ($m) (1): 20429
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 1736
FY09e pretax earnings after interest costs (4m) (3): 2755
Takeover premium payable (%) (4)=(3)/(2)-1: 59
______________________________________________________________

Company: Harvey Norman
Industry: Retailing
Shares (millions): 1063
Market cap ($m) (1): 3954
Pretax funding cost of equity ($m) (2)=(1) *8.5%: 336
FY09e pretax earnings after interest costs (4m) (3): 517
Takeover premium payable (%) (4)=(3)/(2)-1: 54
______________________________________________________________


----------



## Lavender689 (17 May 2008)

Vida,

Thanks for sharing your view on the litigation.

I am not a lawyer and don't know about the likely developments of this litigation.   

However, I think, from what we've heard/read so far:

The inaccurate/misrepresentation in its accounts seem to be mainly relating to:
(a). the reporting of short-term debts under non-current liabs;
(b). the incorrect provisioning for some non-cash items (eg. write-offs of intangibles, and property asset value?)

(can someone add what I am missing here please?)


A couple of points here are:

1. Does such misrepresentation, especially (a). above directly lead to share price plunge/losses by shareholders?

(the assumption here is that for the claims to be totally legitimate, there should be a direct link)

The answer is clearly not, or not totally at least.  The situation has been excerbated by the credit crunch. Had it not been for that, and CNP could have renewed its short-term borrowings and nothing could have happened. 

2. If it is proven that the directors and the auditors - PWC are negligient in terms of financial reporting itself (forget about the shareholder loss here), their professional liab insurance should partially cover the claims.

It is a separate issue here, directors/auditors not fulfilling their duties. 

3. In the worst case scenario, CNP is liable for the payment of claims (though it is not likely to be the inflated amount as claimed by the lawyers), there is always an option for them to set up a claim reserves fund of some sort, which is to be sourced from its future earnings/cashflow, and pay the shareholders gradually into the future. 

(James Hardie case -asbestos claims is of a much worse situation, I believe, and they were doing something similar to this? from memory, though from my understanding they were very cunning and re-registered the company in Holland.

Correct me if I am wrong here. )

4. the point here is that shareholders would get nothing/little if CNP goes under.  

Assuming some of the individuals/institutional investors joining the class order litigation still hold some CNP shares, they would also suffer more losses if there is too much negative publicity on the litigation, as is happening now. 

The key thing here is that, if they want some fruits out of this whole exercise, they should be patient enough to let the tree grow healthily and bear fruit first.  Otherwise, they are hurting themselves in a foolish way.

I am sure that the entities/individuals joining the class order litigation are smart enough to know this, and will handle the process appropriately.  Otherwise, it is lose/lose for CNP management and shareholders, and the lawyers and the funding firm are the only winners.

5. Given the size and importance of CNP to the retail property trust sector here and in the US, chances of CNP going bust is very remote, as the liquidation sale of its assets would cause significant price contraction to the whole sector.  This probably partially explains the government's recent tax reductions for foreign investment in property trust?

6. As mentioned numerous times by other people, the management contracts CNP holds form a large part of the intrinsic value of the business. 

7. Additionally, the current complex organisation structure also made it difficult for lenders to liquidate the company.

8. Re recent staff resignation:

IMO, the nature of the job of a centro lease manager is not much of rocket science. The business itself is pretty straightforward and standardised, I presume anyone having spent some time doing this can handle the job well.

It is not a major concern.

(Vida, you are right, the media has got nothing to report and therefore sensationalised such a small matter.)


I presume there are still a lot of uncertainties over the next two weeks, with media unduly fuelling on potential trivial matters/negativities.   

We will have to be more observant to the share price movements and get a hint from them.  Unfortunately, it is not a perfect market and there are always leakages of info prior to its being known to the public.  
Most of us, unfortunately belong to this group.   We certainly need to be more alert to any signalling signs/movements.


Let's keep on sharing information on this forum. 

Good luck to all of you!

Cheers, L


----------



## metric (17 May 2008)

> Excerpts of an AFR article re cheap takeover targets
> 
> CitiGroup reckons a takeover premium of 860% for CNP (36.5c last Friday close)
> 
> Apparently, CNP, the high profile victim of credit crunch caused by US sub-prime mortgage crisis is massively undervalued at the moment.




i hope this makes an impact on the market monday. good press on centro is a rare commodity these days.

couple this with the upcomming ann due may 30 (buy on rumour) the sp may continue its green days.

we live in hope.


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## gensis1 (17 May 2008)

Companies in centro's situation only need minor 'adverse news' to make the sp tumble...it would take big asset sales, (or a takeover)and a 'turning of the corner' past may30 to make the sp climb...here's hoping..


----------



## metric (17 May 2008)

i read on another forum that the 860% premium makes the sp worth $1.31.. lol . wouldnt you like to see that close on monday!!??


----------



## Lavender689 (17 May 2008)

The valuation as implied by the takeover premium of 860% is actually AUD3.5/share. Remember the word "premium" here, i.e. the amount above its current price.


----------



## gensis1 (17 May 2008)

I heard the $1.31 is their asset backing..(without including what the management side of the business is worth) cer is $1.65/share


----------



## metric (18 May 2008)

but is this news? will it have any effect on the market?

lavender; is 3.5/share, $3.50 per share?


----------



## cnpwellwisher (18 May 2008)

Lavender689 said:


> Excerpts of an AFR article re cheap takeover targets
> 
> CitiGroup reckons a takeover premium of 860% for CNP (36.5c last Friday close)




Hi Lavender,

I was searching for the above news on the internet, but couldn't find it. If you can please let me know the source. U reckon this is genuine news as before 2 months we had rumours of centro being sold at 90cents/ share which saw the sp rising drastically and then trading halt.
Any effect of this news when the market opens on monday


----------



## Lavender689 (18 May 2008)

Hi CNPwellwisher,

As I mentioned in the post, it is part of an article in weekend AFR (May17-18).   It listed AFG and CNP, amongst  other companies as cheap takeover targets.  takeover premium of 860%, i.e. implying a price of c. AUD3.5/share.

I got it from another forum, someone actually typed it in, which I appreciated very much.

I am not sure whether the surge on Friday to 38c at one time was as a result of this. there are people out there who know things well ahead of the public.

But certainly, what I can see also is that, Merrill Lynch (ML) had a sell recommendation lately with a target price of 26c, which unduly contributed to the recent share price plunge to 33c at one point. 

It makes me wonder how ML has arrived at the target price of 26c. It apparently does not reflect the quantum impact of what's happening over the last week also (i mean the positives far outweigh the negatives). 

Certainly, recommendation from a big broking firm like them would have a big impact on the market, no matter they are honest and fair in their opinion or not.   I guess, even if the price falls to 26c, or 33c as it was on Thursday, you can't say that their predictions are great.   The position ML is in/their large clientile/impact makes the market go in the direction as per their recommendation.

I am not sure whether there are any requirements from regulator that make them more accountable for their opinion.   They've got to make well grounded recommendations, especially when it comes to target price, rather than just a random discretionary estimate.  It is just not fair.   It only heops the shorters to reap more profits. 

It prompts people to think how there can be such a huge difference between Citigroup's takeover price of c. AUD3.5/share vs ML's target price of 26c.

Surely one can argue that ML is saying a short-term price target (which may incorporate market sentiment), whilst Citigroup's AUD3.5/share is a fair valuation, in their opinion. 


It is just crazy the way the brokers work. Does not seem to make sense.

Can anyone pls shed some light on this?

Thanks,  L

Thanks,
L


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## oldblue (18 May 2008)

Hi L

I wouldn't worry too much about a broker's report.

'The Australian" carried a story on 3 January which quoted the same ML as valuing CNP as a going concern at a price of between 26c and $2-03.

Hang on! They've been right so far!!!!


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## Lavender689 (18 May 2008)

Oldblue,

Thanks for your post. 

What I was saying was that with the recent developments, share price target predicted by ML should not be as low as 26c.  Back in Jan, when there were too many uncertainties, it was probably fair for them to predict a sp range of 26c to $2.03 as you mentioned above.

I guess now, it should more be a going concern valuation, rather than a liquidation valuation.  I doubt that even a liquidation valuation could be as low as 26c, given the asset backing of c.1.31$/share or a bit lower given the asset value reduction, liquidation costs, etc.

It should be noted that financial misrepresentations so far have been relating to the classification of short-term borrowings under non-current liabs, and the amount of non-cash write-offs, which in no way would lead to a price of as low as 26c, IMHO.

It would be interesting to see how SP pans out on Monday with the media report of financial reporting being unreliable, and the Citigroup takeover premium of 860% (implying a valuation of c. AUD3.5/share). 

Let's wait and see. 

Cheers, L


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## Lavender689 (18 May 2008)

I think one thing is that brokers' valuation should be well grounded, not taking into account too much market sentiment, because they themselves already contribute hugely to market sentiment via their recommendations.


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## vida (18 May 2008)

It could be a bit of what comes first, the chicken or the egg.  I am a bit nervous about this week and the CNP sp but will just get on with my life as best I can and hopefully the CNP people will get on with business as best they can and all will be well




Lavender689 said:


> I think one thing is that brokers' valuation should be well grounded, not taking into account too much market sentiment, because they themselves already contribute hugely to market sentiment via their recommendations.


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## mapna (19 May 2008)

Another sideway day for CNP ... up/down and then sideway ...

I thought with the good article on the weekend AFR, CNP would be very active today from the time the market opened.

Anyway, see what happens tomorrow ... 30/5 is coming soon.

Goodluck to all.


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## Santoro (19 May 2008)

Another sideways day for Centro but also the lowest volume day for a few months......what does this spell for Centro? Indecision in the market place...
where to from here?


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## gensis1 (19 May 2008)

ASSET SALES is the key forward for cnp and sp.I think anyone looking to takeover cnp,won't, until the debt is stabilised,and that won't happen until assets are sold.Banks will also be more supportive...and so on..If the banks approve conditions to may30, the sp should rise..but i think once cnp has negoiated the offer for caf(centro america fund=$1bil book value),sp should rocket.


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## oldblue (20 May 2008)

Speculation in this morning's "Australian" that Centro is in serious discussions with buyers for 10 of the 25 shopping centres that have been put up for sale.

Here's hoping!


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## Lavender689 (20 May 2008)

0938 [Dow Jones] STOCK CALL: 

Credit Suisse upgrades Centro Retail (CER.AU) to Outperform from Neutral, keeps 58 cent target.

 "Our rationale is based on portfolio theory as much as valuation: we do not think a 'naked' exposure to a Centro recovery is prudent (we have a corresponding Underperform on Centro Properties (CNP.AU))," analyst says. "The Centro entities have massive refinancing needs as well as litigation risk. However, in an improving credit market, the odds of a resolution with some remaining equity value to CER unitholders is improving," analyst says. Also notes that U.S. REITs, a potential buyer of CER assets, hit an all-time high last week, with strip REITs up 10.6% in the year to date. CER last at 38.5 cents. (LMF)


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## gensis1 (20 May 2008)

Good news sp. up..on this update, hopefully up again through the week with some announcements on asset sales..


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## vida (20 May 2008)

All good, I guess I missed another buying opportunity over past few days.. that's what these SP slides are in fact, but we just can't pick the bottom. I have really given up on that and am holding my CNPs with no thoughts of buying or selling now as its too stressful. Enough to keep what I have and watch it go up and down like a yo yo performer and I admire how clever it is
 lets see if it can rocket and stay up for a while like a good girls' garter



gensis1 said:


> Good news sp. up..on this update, hopefully up again through the week with some announcements on asset sales..


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## gensis1 (22 May 2008)

News today in afr about the increase in value of mab property trusts US properties, even though centro's US properties have fallen in value...(whats going on here..?..somebody got ripped..)I hope this also means that centro's US assets will rise in value in the near future and they'll be able to sell them @ book value soon...


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## tulasi74 (22 May 2008)

Just wondering if anyone in the forum knows what CNP's interest in Centro NP in the US is?

In the last report lodged by Centro NP, they wrote down asset by around another half a billion.  Just wondering how this might impact on net asset backing for Centro.

The writedown was to land and properties owned by Centro NP which owns the New Plan acquisition.

If anyone has that information, pls let me know.

Tulasi


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## tulasi74 (22 May 2008)

Please see below an extract from Centro NP's latest SEC filing:

_Going Concern



There is substantial doubt about the Company’s ability to continue as a going concern given that the Company’s liquidity is subject to, among other things, its ability to negotiate extensions of credit facilities.  The Company’s inability to refinance the credit facilities would have a material adverse effect on the Company’s liquidity and financial condition.  In addition, uncertainty also exists due to the refinancing issues currently experienced by the Company’s ultimate parent investors, Centro Properties Group and Centro Retail Group. If the outcomes of these negotiations are not favorable to Centro Properties Group and Centro Retail Group, it is uncertain as to the impact that this will have on the Company.



It is noted that Centro Properties Group and Centro Retail Group both recently filed reviewed financial statements for the six months ended December 31, 2007 with local Australian regulatory authorities whereby the auditor identified material uncertainty regarding their continuation as going concerns.



The Company’s management team continues to work closely with its counterparts of the Company’s ultimate parent investors (Centro Properties Limited (“CPL”) and CPT Manager Limited (“CPT”)) and the lenders of the Company, Super LLC, CPL and CPT to resolve the various liquidity issues._


Am currently trying to find the latest financial statements filed with ASX or ASIC.

Tulasi


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## vida (22 May 2008)

There is nothing new about the 'uncertainty' factor in these latest reports. The refinancing issues are anything but certain in being resolved but there is a possibility they will be and then it will be a going concern into the future.




tulasi74 said:


> Please see below an extract from Centro NP's latest SEC filing:
> 
> _Going Concern
> 
> ...


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## cnpwellwisher (23 May 2008)

hello centro investers...... What's going on with CNP and CER guys ??? Still how many days we need to keep waiting to SP rise ???? Atleast I cant wait.....


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## propergeez (24 May 2008)

cnpwellwisher said:


> hello centro investers...... What's going on with CNP and CER guys ??? Still how many days we need to keep waiting to SP rise ???? Atleast I cant wait.....




US markets are on the down again, Oil prices are on the up again. CNP will continue its retreat of 1-2c a day whilst this happens. Still believe this will be in the .2's next week before any rise and when the rise comes it will be very limited, with traders selling off (at a nice profit) keeping the SP down. I do not expect a huge spike, traders have learnt from the previous months.


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## ian2382000 (24 May 2008)

Disagree with last comment as everyone is waiting for the end of May and the trading volumes support that. If the extra 100 mill etc all signed off will be a small boost but what will get it going again is good asset sales ie BV and if possible retain the management which is what they are good at as per the recently released figures plus this has not even been valued into the $1.31 valuation. Could be close to .90 in June but would depend mainly on who is buying


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## s3081402 (24 May 2008)

propergeez said:


> US markets are on the down again, Oil prices are on the up again. CNP will continue its retreat of 1-2c a day whilst this happens. Still believe this will be in the .2's next week before any rise and when the rise comes it will be very limited, with traders selling off (at a nice profit) keeping the SP down. I do not expect a huge spike, traders have learnt from the previous months.




The dow have little affect on CNP. Everyone is waiting for a good ann to be out just before 30th May to make their decision. Most traders have made their profit by selling this from 50c to 35c.


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## vida (24 May 2008)

For sure there will be a good announcement before 30 May. The guys at CNP have not been bunkered working long focussed hours with co-operation from bankers for nothing. They are an effective team now and will succeed at it.



s3081402 said:


> The dow have little affect on CNP. Everyone is waiting for a good ann to be out just before 30th May to make their decision. Most traders have made their profit by selling this from 50c to 35c.


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## gensis1 (24 May 2008)

Centro have had a good amount of time now to consider all the options open to them, in so far as the recap plan. I think that they are in a stronger position now then 4 months ago,and believe that if they were that desperate  they would have sold many assets by now to pay down debt.The fact that they are picking and choosing what assets to sell and who they'll sell them to,tells me they're in a better position.This also makes me believe that they may have a back up plan(like merger or t/over deal in the wings).I don't believe this would occur this week though..moreover past may30...lets wait and see..I know i'll be holding them.


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## tulasi74 (24 May 2008)

I too am expecting a good announcement.  I think the 100 mln is a minor issue as the banks have already extended 6.6 bln worth of debt to December 15 and if newspaper reports are to be believed CNP have JP Morgan on their side.  JP Morgan and HSBC are still substantial shareholders inthe company.

The more bigger issue is getting agreement among the various creditors on how proceeds from asset sales are to be used, refinancing or equity injection.

I also think the CEO is very keen to keep the company afloat and do what is in the best interest of shareholders as well as creditors because CNP employees themselves have a lot at stake in the company.

As to share price, I am not expecting share price to rise above 52 cents on any announcements that only includes information on 100 mln liquidity or agreement among creditors as the risk posed by litigation in my view will offset any positive sentiment.  Significant increase in share price will only materialise if assets are sold close to book value while management rights are retained combined with some form of equity injection.

Good luck everyone.

Tulasi


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## MU002 (25 May 2008)

when the whole markets going down, the most "safe" stocks to buy is undervalued ones like CNP. We can recall the middle of March this year when I saw CNP is of those shares that can keep stable or even get gain in such a tough situation. If anyone notice the trades of CNP last week, it is not volitile anymore. That's really a good sign for this share. I saw big buy volume after 4:00 pm last Friday at around 1 million. Looks buys now prefer to get their accumulation quietly . After several huge surge, CNP is hard to hit below 30c anymore. But still, CNP holders need to wait a pretty long time before the SP recover to 60c or even 90c. Again, big reward is not easy to get, you'd better take account into the opportunity cost when you are holding CNP.


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## nioka (25 May 2008)

MU002 said:


> CNP holders need to wait a pretty long time before the SP recover to 60c or even 90c. Again, big reward is not easy to get, you'd better take account into the opportunity cost when you are holding CNP.



 Slow and steady will win the race. CNP are over their biggest hurdle now and I'm not expecting it to be too slow recovering from here on.


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## gensis1 (25 May 2008)

news today about a second class action against centro...though not good news,I think the market had expected it,with past speculation..(news)
Interesting to see westfields annoucement on distributions payout and company performance..they are looking at aquisitions..and its been speculated they might be interested in centro's assets.


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## propergeez (26 May 2008)

gensis1 said:


> news today about a second class action against centro...though not good news,I think the market had expected it,with past speculation..(news)
> Interesting to see westfields annoucement on distributions payout and company performance..they are looking at aquisitions..and its been speculated they might be interested in centro's assets.




Its a bit early for a trading halt, did they halt trades when they announced that they were going to fight the last class action? Or is this the thumbs down/ up for May 30th?


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## cnpwellwisher (27 May 2008)

Price for CNP was steady throughout the day. Just an hour before closing it went up by approx 7 % and then closed at 4% above yesterday closing. Same was the case with CER. Moreover there wasn't any notice or news  

Could insider information be a reason for sudden increase in SP ???? Hope this increase continues for few days.....


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## gensis1 (27 May 2008)

the claim is now $700mil according to news (aap)..don't know if this is the reason for the price surge late in afternoon...the lawyers did say that the claim was not worth persuing if centro was going into administration, and they don't believe it will..


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## Khailor (27 May 2008)

Hey, wasn't there a few bids on the table a few weeks back for 90c. I never saw a spike in share price for that, my guess is that it was all rumours, but still didn't seem to spec the share up. What are people's views on the looming court cases...


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## wilko66 (28 May 2008)

Obviously a lot of stories in media today about the court case.  AFR raises one potential positive: that the additional security offered if the extension proceeds is even more compelling for the banks now.  

In the midst of all this, an article in the age mentions indications/rumours of asset sales.  Let's hope that is so and the prices received are near or better than book value.  

http://business.theage.com.au/centro-keeps-quiet-but-centres-sale-is-close-20080527-2iq8.html


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## ian2382000 (28 May 2008)

It appears that the assets they want to sell are nearly finalised and indications are a total of 2 BILLION worth has been sold at BV or above so if this is correct then expect a positive affect on the sp


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## vida (28 May 2008)

I think the SP will take a positive trend shortly.  THe court cases are ridiculous as it is a matter of shareholders/investors suing themselves basically.  Where does that get you even if you win you lose!!  The lawyers are taking advantage of emotionally vulnerable investors and I could see their happy faces in the newspaper today going to court with all their blessed documents to try to destroy Centro.  What is the purpose of that?  Just anger/revenge fuelled by the funding company and the lawyers who want to make money and build their business. Its simply unconscionable and I feel like suing the lawyers and the funding providers who are self servingly putting my investment at risk like this. Simply wrong thinking and where money is the issue there is plenty of that to be found and this is no exception. Where are the lawyer jokes??? Keep them coming ... this is lose/lose for the plaintiffs



ian2382000 said:


> It appears that the assets they want to sell are nearly finalised and indications are a total of 2 BILLION worth has been sold at BV or above so if this is correct then expect a positive affect on the sp


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## MU002 (28 May 2008)

sale of Australia properties is not good for centro, cos these assets can generate more stable income for centro. but something good is that Centro wants to keep major shopping centers like the Glen, maybe means it hasn't given up yet. The media is sort of misleading again saying deadline for centro is this week. We all know the extention is to Dec. The reason to set those conditions and interim check point could be lenders' protection from  default of centro's management during the extention period. The legal suits of course is big trouble to Centro, and this is one of the reasons we can buy cnp at current price level. It's very hard to forecast how much value gonna left for share holders in the worst case. The reason I buy cnp and cer is simply based on valuation, though so many other things could also affect the result and that's the risk. We always have the risk to lose something in our life, the only thing has no risk is that we gonna lose everything at the end


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## s3081402 (28 May 2008)

MU002 said:


> sale of Australia properties is not good for centro, cos these assets can generate more stable income for centro. but something good is that Centro wants to keep major shopping centers like the Glen, maybe means it hasn't given up yet. The media is sort of misleading again saying deadline for centro is this week. We all know the extention is to Dec. The reason to set those conditions and interim check point could be lenders' protection from  default of centro's management during the extention period. The legal suits of course is big trouble to Centro, and this is one of the reasons we can buy cnp at current price level. It's very hard to forecast how much value gonna left for share holders in the worst case. The reason I buy cnp and cer is simply based on valuation, though so many other things could also affect the result and that's the risk. We always have the risk to lose something in our life, the only thing has no risk is that we gonna lose everything at the end




CNP will try to retain managements rights for as much of these assets as they can IMO. The media is a joke. Most of them report crap most of the time.


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## sanj (28 May 2008)

ian2382000 said:


> It appears that the assets they want to sell are nearly finalised and indications are a total of 2 BILLION worth has been sold at BV or above so if this is correct then expect a positive affect on the sp




Is that 2 Billion fiqure based a article you read or a personal estimation? If it is a article, would you mind posting the link, just curious to see which ones have been considered sold.

much appreciated.


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## ian2382000 (28 May 2008)

Came from another forum from person who had contacted Jones Lang."I gave some details of where the properties are located and they are being marketed (and will sell) at or above book in most cases. As I suggested yesterday, you could easily verify this yourself if you used the right approach. Fairfax obviously took up the suggestion. You will see that some of the properties are co-owned with CER so the sale of the whole property will be an uplift on CER as well.

Jones Lang are running the operation centrally in coordination with Centro HQ in Melbourne and assistance from various state offices" extract from message. Have not read earlier message for the breakdown.


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## s3081402 (28 May 2008)

sanj said:


> Is that 2 Billion fiqure based a article you read or a personal estimation? If it is a article, would you mind posting the link, just curious to see which ones have been considered sold.
> 
> much appreciated.




The article was from the age. The reporting is poor. We will soon find out if this is true or not. May 30th deadline.
http://business.theage.com.au/centro-keeps-quiet-but-centres-sale-is-close-20080527-2iq8.html


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## ian2382000 (28 May 2008)

something else this same person said which can be confirmed "On a final note, it's also worth pointing out that a) Rents on the Centro US assets are NOT based on turnover in the individual stores (unlike Westfield) which means that rental will not decrease if store sales decrease, unless the lease is terminated b) Centro smartly built in annual rent rises to their lease agreements which will go part-way to countering any decrease in the valuation of their properties.

I recommend listening to the annual report webcast from Andrew Scott and the team on 9th August 2007 (my birthday) to get a feel for some of the strategic elements in the portfolio, most of which have been overshadowed by the current woes. Whilst an awful lot has changed, a lot still remains the same." which shows that there could be good value in the US assets and not to write them off as some have


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## mapna (28 May 2008)

2 more days for CNP share holders to know where we stand? there may be few things happening in the next couple of days:

- ann. about the 30/5 terms/conditions for the extension to Dec/2008.
- ann.  regarding the assets for sales or any discussion about it 
- more articles regarding the lawsuits ... 

CNP is on hot spot atm...

IMHO - DYOR.


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## propergeez (28 May 2008)

Management Rights

It will be interesting to see how the 50/50 CNP/CER split works in sales transactions. All along Centro has stated that it would prefer to retain 50% or majority value within the tenants so that they would be able to retain management rights and profit from them. So if they have managed to hold a majority share within their sales will the proceeds be equally split between CER and CNP? With an outright buy, there is no such problem.

Boom and Bust Time

The reported sales all seem to be Australia based, Australia is still in the middle to end of the mining boom (avoiding recession) and as such will retain their estimated book value. This however presents the US problem - recession. Currently with 68% of their assets in the US - this will obviously increase with sales in OZ, leaving them very open to the effects of US recession. US housing prices are down 14% nationwide in 1 quarter! This is why Centro's price will be effected by the DOW in the coming months, the index is a measure/ indicator of US wealth and any movements will have an impact on CNP/ CER SP.

Another Month another hurdle.

Court proceedings, as if Centro haven't got enough problems all of their previous and some current major institutional investors are backing the court proceedings. Not isolating short term debt from long term debt on their books will be the key litigation point. The only good point about the court case is that it will be dragged on and on as long as Centro retains solvency, giving Centro time and unfortunately lawyers money. This will keep the SP down for time to come.


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## tulasi74 (28 May 2008)

propergeez said:


> Management Rights
> 
> 
> 
> ...


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## propergeez (28 May 2008)

tulasi74 said:


> propergeez said:
> 
> 
> > I didn't think it was 14% in one quarter.  I thought it was a comparison of housing prices for first quarter 2008 compared to first quarter 2007.  So its a 12 month change rather than a one quarter change.
> ...


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## gensis1 (28 May 2008)

centro already has an offer on the caf(centro america fund),and will be decided upon by 7june..bv 1bil..


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## propergeez (28 May 2008)

gensis1 said:


> centro already has an offer on the caf(centro america fund),and will be decided upon by 7june..bv 1bil..




Does that mean they are selling their 50% at $1B, or their institutional investors are also selling which means they will get $500M. First way is above book value, second is way below!


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## propergeez (28 May 2008)

Sorry, by the look of it Centro only owns 25% of CAF:

http://www.centro.com.au/Investment+Products/Centro+Properties+Group/Centro+Business+Model.htm


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## wilko66 (29 May 2008)

Only a snippet but mentions $1.2b for CAF 

http://www.businessspectator.com.au/bs.nsf/Article/US-sales-to-ease-pressure-on-Centro-F3TAQ


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## propergeez (29 May 2008)

The figure of $1.2B has been bandied about, however this is for the whole of the fund of which CNP owns 25%. So CNP will receive $300M - not peanuts but not $1.2B.

From Centro 2007 report:

"Centro prefers co-ownership of its retail property assets through a 
two tier ownership structure where Centro effectively owns 50% of 
a diversiﬁ ed fund (e.g. Direct Property Fund, Direct Property Fund 
International) which in turn owns 50% of an ownership fund (e.g. 
Centro MCS Syndicates, Listed Funds, Wholesale Funds) which own 
the underlying retail property asset ﬁ nanced by both equity and debt. 
Therefore through the two tier structure, Centro has an effective 25% 
equity ownership in the underlying retail property assets. Graham Terry 
Chief Operating Ofﬁcer"

"In November 2006, Centro established two new retail property 
wholesale funds – the Centro Australia Wholesale Fund (‘CAWF’) 
and the Centro America Fund (‘CAF’). In line with Centro’s business 
model, Centro has co-invested in these funds through interests 
held by the DPF and DPFI. CAWF was the result of the spin-off by 
Centro of $2.5 billion of directly owned Australian shopping centres 
and CAF is a portfolio of A$1.1 billion of US properties."

Whether they will be able to continue management of CAF and earn some money from that is another question for the new owners, perhaps CNP have put in a caveat to the new owners stating CNP management for 2 years?


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## gensis1 (29 May 2008)

Retaining management is probably why negoiations were on going...and overall taking longer than normal.. and i think cnp/cer are 50/50 ownership according to reports.


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## gensis1 (29 May 2008)

The reports are saying 95% of caf is being sold for $1.2bl($1.16bl/us)..this is probably to retain management rights through a 5% stake..


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## MU002 (29 May 2008)

Looks day traders back again into centro... acturally, it's not bad for us to follow the trend to make some profit as well. if you have faith in centro's business, buy some when the price is low, and just hold, you will see the profit margin is much bigger than trading other shares. it's just because the minimum share price interim is 0.5c, makes every price change a big percentage move. thanks again to the low price. I think we dont need to worry too much about US propery price. the slump is largely in the residential property market, right? What's centro's assets? shopping centers. the valuation is based on the rental income plus the whole property market premium. i think the case is, when property market turning down, it just makes commercial property more attactive than residential ones. and among commercial properties, shopping centers should be more popular than offices when the economy is weak, like the situation in US today. that is why banks still be willing to hold centro's assets rather than sell it all together.


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## oldblue (29 May 2008)

Hi MU
All true, up to a point.
Don't overlook the fact that most of these shopping centre rentals have an element of " return on turnover" in them. A sustained retail downturn will show up sooner or later in the returns to owners.


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## nioka (30 May 2008)

Trading halt till Monday. Now comes the moment of truth. Here's hoping for good news. ???????? Any ideas?"


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## hsv2001 (30 May 2008)

I really wouldn't know which way to think about this, I don't know whether i'm glad i got out or not. In one sense i'd be worried that a trading halt was called during a class action claim, however today someone has exercised 500000 options at $9 each!!! now that to me, unless they are very unlucky, seems that someone knows something everyone else doesn't. Oh besides the various $1.20 options that were also exercised.

Here's hoping for all you holders, maybe i'll get back in to CNP.

Good luck
Marc


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## nioka (30 May 2008)

hsv2001 said:


> I really wouldn't know which way to think about this, I don't know whether i'm glad i got out or not. In one sense i'd be worried that a trading halt was called during a class action claim, however today someone has exercised 500000 options at $9 each!!! now that to me, unless they are very unlucky, seems that someone knows something everyone else doesn't. Oh besides the various $1.20 options that were also exercised.
> 
> Here's hoping for all you holders, maybe i'll get back in to CNP.
> 
> ...




 Excersing options at those prices doesn't seem realistic. I couldn't find any thing on that event. Where is it recorded?. It would be an expensive way to buy votes, that is often the reason for the excersing of options before some announcement requiring a vote by shareholders.


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## hsv2001 (30 May 2008)

it is in CNP market depth this morning, 

Last 10 Trades
Time	Price	Quantity
07:07:37 AM	9.000	500,000
07:07:37 AM	1.200	6,000
07:07:37 AM	1.200	27,000
07:07:37 AM	1.200	3,000
07:07:37 AM	1.200	1,000
07:07:37 AM	1.000	5,000

I may be wrong, but that's how i read it.


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## nioka (30 May 2008)

hsv2001 said:


> it is in CNP market depth this morning,
> 
> Last 10 Trades
> Time	Price	Quantity
> ...




 As I see it that looks like forced completion of forward contracts. Looks like some people are still losing money. It isn't someone exercising options.


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## tulasi74 (30 May 2008)

It was some smart person who bought put options at exercise price of 9.00.  That is option to sell.  If they think its going to go higher from current price, then now is the best time to exercise it.

Tulasi


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## gensis1 (30 May 2008)

Wouldn't worry about earlier trades...it won't have any effect on opening sp...but an ann. with asset sales definitely will have a greater effect on sp than just the finalised agreement..


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## tulasi74 (30 May 2008)

Does anyone have any new info on Centro?  Cannot even find the company's request for trading halt.  Normally that is available on Webiress.  I am just trying to find out if anyone know when an announcement is likely to be made and when we could expect the shares to resume trading.

Tulaisi


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## nioka (30 May 2008)

tulasi74 said:


> Does anyone have any new info on Centro?  Cannot even find the company's request for trading halt.  Normally that is available on Webiress.  I am just trying to find out if anyone know when an announcement is likely to be made and when we could expect the shares to resume trading.
> 
> Tulaisi



 Best site for up to date announcements is the ASX site. Centro will reopen for trading Tuesday morning or after the release of the announcement whichever comes first.


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## gensis1 (30 May 2008)

Trading halt is until tuesday or until ann. is made from asx...(no further info is given in the letter)


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## tulasi74 (30 May 2008)

Just checked Etrade website for company announcements by Centro.  At 2.57pm there is an amended request for trading halt. This is the letter by the company and it states that announcement will be made before trading opens on Monday.  I guess this means announcement could be after market close today or early on Monday morning.

This just looks like its going to be another interim extension on the conditions set out on May 30.  The announcement made on May 8th did state that if the conditions are not met, the further extensions may be terminated. Not will.  So another extension on the May 30 deadline could be on the cards.

Wonder when they will be able to just go on with business as usual without all these extensions and conditions.  

Tulasi


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## sonicwind (30 May 2008)

doesn't look good to me, positive news shouldn't take this long to announce.

unless they have got a few news to release in one go...


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## tulasi74 (30 May 2008)

I agree that positive news shouldn't take that long to announce. If past history is any indication, it could be that its going down to the wire.  Some media reports state that there might be dispute amongst the banks and WestLB might once again be a sticking point.  

Since deadline was close of business today to meet the conditions and CNP request for trading halt stated that the announcement might be made before trading commences on Monday, I had expected an announcement to be made after COB today. But I have kind of given up now unless they do what they did on Feb 15th and post it on the website very late at night.

Some media reports also state that US Banks loans are secured and they are seeking repayment by September 30 when earlier media reports said that on September 30 CNP would need to renegotiate with them to extend those debts to Dec 15.

Bollinger bands are telling me either 49 cents or 67 cents on the upside but if its negative, possible retest of all time lows of 23 cents.  This is just my view and please DYOR.


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## tulasi74 (30 May 2008)

The latest share price for CNP and CER on www.centro.com.au is 0.00.  Does anyone recall if this was the case the last time there was a trading halt?


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## Birdster (30 May 2008)

tulasi74 said:


> The latest share price for CNP and CER on www.centro.com.au is 0.00.  Does anyone recall if this was the case the last time there was a trading halt?




That is scary! I do not hold, but feel for the ones that do! It MUST be some sort of glitch.    The company has assets, but the company has debts. End of day, must be better than ~ .37 cents even on a fire sale of al assets.

Birdster.


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## Santoro (30 May 2008)

tulasi74 said:


> The latest share price for CNP and CER on www.centro.com.au is 0.00.  Does anyone recall if this was the case the last time there was a trading halt?




Likely due to the trading halt. No closing price to display.....................................................................


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## tulasi74 (30 May 2008)

Santoro said:


> Likely due to the trading halt. No closing price to display.....................................................................




Thanks. Thought that might be the case but I have pretty much been going to centro website on a daily basis and cannot recall seeing that before when the stock was on a trading halt.  I was guessing that the big difference today is that its month end and maybe option expiry date too.  Last time there was a trading halt at month end was on April 30 but on that day the stock resumed trading at around 3.40pm in the afternoon.


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## nioka (30 May 2008)

As I read the announcement is does say the notice is about SATISFACTION of the conditions. I guess that means agreement with all parties. What we need to know are the terms of the (satisfactory) agreements. Looks OK to me on that basis.


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## cnpwellwisher (30 May 2008)

In the morning centro requested for trading halt till 3rd june and then in the afternoon requested for trading halt till 2nd of june. I think the deal between centro and the bank is going to be finalised very soon. That's the reason they changed the halt date from 3rd to 2nd june as they are confident of the outcome i.e. banks will be ready for extension.....

secondly the valuation for centro properties (CNP) is 2.694 and CER as 0.71 on Etrade website. Does it mean that if any the takeover takes place we would get 2.69 or atleast a dollar or two per share for CNP ??? When they do the valuation do they take into consideration the debt of the company ????


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## thooh (31 May 2008)

Dear cnpwellwisher,

you posted"secondly the valuation for centro properties (CNP) is 2.694 and CER as 0.71 on Etrade website."
I went to the Etrade website and I was unable to find this information.  Do you mind posting the full information of the valuation? and could I please know what date this valuation was posted on the Etrade website? 

Thank you so much


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## vida (31 May 2008)

The news at the moment is very positive   the extension is granted until September and only the sales results are not confirmed at the moment is what I understand. The SP should spike on Monday if trading resumes but by how much we will only know when it happens.  I was thinking of buying more yesterday at .36 or whatever it was but then got busy at work and forgot about it and today its on trading halt. One has to be focussed all the time on this stuff to make it real but I just can't do it so miss golden opportunities a lot but also miss out on making some big mistakes too I am sure which evens things out even if I don't see it happening.  So the only problem I have right now is whether I should sell next week or hold. All I know is I wont' be buying more too soon but selling I will certaintly think about. Too late to buy more at least for me it is. I have some stashed cash and it feels good to keep it rather than put it all on the market, a bit like throwing it all on the roullette..


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## hartley (31 May 2008)

cnpwellwisher said:


> In the morning centro requested for trading halt till 3rd june and then in the afternoon requested for trading halt till 2nd of june. I think the deal between centro and the bank is going to be finalised very soon. That's the reason they changed the halt date from 3rd to 2nd june as they are confident of the outcome i.e. banks will be ready for extension.....




I'm pretty sure the ASX normally gives you 3 days by default whenever you ask for a TH, by which time you can ask for it to be lifted earlier or extended. Centro has then come out and said there'll be news before monday's open. I wouldn't read anything in to it. That being said I think it's good news anyway.


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## vida (31 May 2008)

Last-minute talks could keep Centro stock on rise
Carolyn Cummins Commercial Property Editor 
May 31, 2008 

INVESTORS in shopping centre owner Centro Properties are expected to be told the group's banks have awarded an extension of its debt restructuring program when the stock comes out of its trading halt on Monday.

After a week of heated discussions among all the international and Australian bankers and bond holders to the retail landlord, it was believed that an agreement was reached late on Friday to give Centro more time to repay the outstanding $4.9 billion-plus borrowings.

Centro had until the close of business yesterday to reach a deal with the banks and meet conditions for an extension of $2.8 billion in debt to December 15.

Part of the conditions to roll over the debt was that Centro bed down a $155 million liquidity facility and satisfy the financiers that sales of assets to repay the loans were sufficiently well advanced.

Directors of Centro and its associate Centro Retail Trust requested a trading halt before the market opened yesterday and issued a statement later in the afternoon that an update is "expected to be made prior to opening of trade on Monday 2 June 2008".

Before the trading halt was issued at 9.15am yesterday, Centro was at 38c, while Centro Retail Trust was at 36c.

Thanks to aggressive day trading that has dominated both stocks for months, there were bids posted for Centro at 46.5c and for Centro Retail Trust at 50c.

Assuming the debt was rolled over, the traders are speculating the prices will move up strongly when trading resumes on Monday.

On May 9 Centro's chief executive, Glenn Rufrano, said he was confident that after the banks reached their own lending agreement by yesterday, the deadline for the major tranche of the total $6.5 billion of borrowings would be December 15.

The United States bankers and bond holders, who flew in to Melbourne this week and were spotted at the Federal Court in Melbourne on Tuesday for the directions hearing for two class actions, have a September 30 deadline.

If the lenders are satisfied that Mr Rufrano can raise the necessary cash then that deadline is also expected to be extended to mid-December.

Centro's main local bankers are ANZ, Commonwealth, National Australia and St George banks. It also has US bank creditors including JPMorgan and Bank of America.

Since Centro's revelation in late December that it was unable to meet its debt obligations, its market value has dropped from about $6.8 billion to last week's $321.14 million.

It was March 1 last year when Centro agreed to buy New Plan Excel Realty Trust for $US3.7 billion in cash to become the fifth-biggest mall owner in the US.

Including debt, the $US6.2 billion deal was the biggest US acquisition by an Australia-based real estate investment trust.


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## vida (31 May 2008)

Centro meets debt deadlineArticle from: Ben Butler

May 31, 2008 12:00am
EMBATTLED shopping centre empire Centro looks poised to announce that a key debt deadline it met yesterday will keep bankers owed about $2.8 billion at bay until the end of September.

Yesterday, the company went into a trading halt, telling the stock exchange it would make an announcement "prior to the opening of trade on Monday". 

Market sources said the company met yesterday's deadline. 

Under its agreement with the syndicate of lenders, Centro had until yesterday to find an extra $100 million for its liquidity facility, currently running at $55 million, and obtain consent from its financiers to sell assets. 

It is believed the new $100 million was provided by Centro's existing bankers, which include the CBA, ANZ, JPMorgan and WestLB. 

The expanded liquidity facility is to be used for capital expenditure, meet higher interest costs and pay Centro's legion of advisers. 

Analysts said there was still uncertainty about the company's long-term future, with its financiers having already written off some of their exposure. 

"At some point banks will decide they've got as much as they can (out of Centro) - they have already taken provisions," one analyst said. 

Plans to sell the whole of the company's $1.1 billion Centro America Fund would not be enough to save the company, the analyst said. 

"It would be a marginal positive, but not enough to pay down the full debt," the analyst said.


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## cnpwellwisher (31 May 2008)

thooh said:


> Dear cnpwellwisher,
> 
> you posted"secondly the valuation for centro properties (CNP) is 2.694 and CER as 0.71 on Etrade website."
> I went to the Etrade website and I was unable to find this information.  Do you mind posting the full information of the valuation? and could I please know what date this valuation was posted on the Etrade website?
> ...




Goto Quotes and Research then select Tools.Then select Stock Valuation Model. Enter the code CNP and it will give you the stock valuation.


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## Sean K (31 May 2008)

cnpwellwisher said:


> Goto Quotes and Research then select Tools.Then select Stock Valuation Model. Enter the code CNP and it will give you the stock valuation.



Sure is quite a difference to their current sp. Is there a reason why they have it so out of whack? Perhaps it's an old valuation? Or is it just sentiment that has driven it down and it's still 'fundamentally' worth $2.70?


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## cnpwellwisher (31 May 2008)

If anyone can please spread some light on how the stock valuation has been done ??? CNP has stock valuation of 2.694, does it mean that in near future the SP could reach 2.694. Does it mean that right now CNP and CER are both undervalued ??? Does it take into account the debt ???


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## gensis1 (31 May 2008)

cnpwellwisher said:


> If anyone can please spread some light on how the stock valuation has been done ??? CNP has stock valuation of 2.694, does it mean that in near future the SP could reach 2.694. Does it mean that right now CNP and CER are both undervalued ??? Does it take into account the debt ???




What happens to the figures once assets are sold? Eps definitely won't be the same...Thats probably why its safe to use the current asset backing valuations (minus debt) of cnp $1.31/cer $1.65 instead.Of course depending on the assets sold and their cap rate,this will ultimitely set the stock valuations.


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## tulasi74 (31 May 2008)

To those who are questioning stock valuation and how it is done, the valuation model appears to be using some earnings per share forecast.  In CNP's case, in their last report, they did not give earnings guidance going forward.  I would say that has a lot to do with their cost of debt which will be constantly changing with extensions, refinancing etc. Revenues too will be impacted if they sell assets but don't retain management rights.

I am not an accountant or anything like that but I have downloaded from Centro website the excel spreadsheet that outlines all their debt, their maturity dates, fixed vs floating rate etc.  I have also studied their financials in depth and a while ago questioned some of the information on that.  A couple of weeks after I questioned it, Centro themselves admitted that their financials cannot be relied upon.

So IMHO, unless someone can accurately estimate what their net income is going to be going forward and I very much doubt the company itself can claim to be able to do that, then doing a stock valuation on tools provided by Etrade website is useless.

In previous posts I have stated that my rough calculations based on current situation suggests that the company is not actually making a profit.  That can change quickly if they reduce debt and thereby reducing cost of debt but maintain management rights.  What would be even better is if they are able to inject equity to pay off debt as that would reduce cost of debt but not reduce revenues so making the entity profitable.  But that is like asking someone to invest in something where the return on investment is very low.

They still have net tangible assets of $1.35 per share for CNP and $1.65 per share for CER but that was before the writedowns announced in the March Quarter report by Centro NP in the US.  I would say that the 90 cents per share that was touted in early April as a bid for the whole company was probably accurate and the reason why it was not taken up might have been because it was conditional on outcome of what would have been pending litigation at that time.

Personally, I would be happy to sell out of the stock at 70 cents and take whatever little profit that I can.  I am keeping in mind that high after Feb 15 extension was only 71.5 cents.  Please DYOR and do what is in your best interest.


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## nioka (31 May 2008)

Tulasi, 

      I agree with what you have posted. Personally I believe that, under the circumstances your valuation is realistic. My goal is to start selling when the SP reaches the low 60s and when I have recouped my initial outlay I will let the remainder of my holding ride along,( free carried as it will be) as a speculation until the end of their financial crisis. I believe the company will survive and return for better days. Todays Fin Rev suggests a satisfactory announcement will be made for next weeks trading.


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## mapna (31 May 2008)

According to the SMH, it said "INVESTORS in shopping centre owner Centro Properties are expected to be told the group's banks have awarded an extension of its debt restructuring program when the stock comes out of its trading halt on Monday."

This is what everyone waiting for ... it is a good news ... no doubt investors would come back to push the SP up ... It may be up to when it announced on 8/5 or higher ... It would be even better if any sale of assets announced on monday.

Good luck to the share holders ... your patience will be paid off.

IMHO - DYOR


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## vida (31 May 2008)

A clip from recent news article:

"Market sources said the company met yesterday's deadline. 

Under its agreement with the syndicate of lenders, Centro had until yesterday to find an extra $100 million for its liquidity facility, currently running at $55 million, and obtain consent from its financiers to sell assets. 

It is believed the new $100 million was provided by Centro's existing bankers, which include the CBA, ANZ, JPMorgan and WestLB. 

The expanded liquidity facility is to be used for capital expenditure, meet higher interest costs and pay Centro's legion of advisers. 

Analysts said there was still uncertainty about the company's long-term future, with its financiers having already written off some of their exposure. "

Looking good but future still uncertain .. that is the best we can hope for at the moment and there will be new deadlines to meet and SP will go up & down


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## vida (31 May 2008)

Centro Nears Sale of A$1.2 Billion of U.S. Malls, Review Says 

By Garfield Reynolds

May 29 (Bloomberg) -- Centro Properties Group is close to selling A$1.2 billion ($1.16 billion) of U.S. shopping malls, as the company prepares to sign an accord with creditors, the Australian Financial Review reported, without saying where it obtained the information. 

Centro, based in Melbourne, is in talks with a single party to sell 95 percent of the Centro America Fund, which holds shopping centers Centro acquired in 2006 when it bought Heritage Property Investment Trust, the Review said. 

Centro could clear A$300 million from the sale, which is being managed by Lazard Ltd., the newspaper said. The company also may sell some of the assets held by the Centro Australia Wholesale Fund, which are being marketed by Jones Lang LaSalle Inc., the Review reported. Jim Kelly, a spokesman for Centro, didn't immediately return a call from Bloomberg seeking comment. 

Centro on May 8 won an extension on debts of as much as A$6.6 billion. The debt extension was conditional on Centro completing A$155 million of new borrowing accords and reaching agreement on creditor accords by May 30, according to a May 8 statement by the company to the Australian stock exchange. 

To contact the reporter on this story: Garfield Reynolds in Sydney at greynolds1@bloomberg.net 

Last Updated: May 28, 2008 17:17 EDT


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## dingo37 (1 June 2008)

here is a post buy swap from another site,

a very valued poster and a worth while read 

might just chip in a couple of cents worth here. Lawrence has raised a good point.

Without a doubt, the future of both Centro entities carry a level of uncertainty and remain a very, very high risk. Everyone here knows, or should know, that there is a chance they could lose all of their money and if they are on leveraged instruments like CFDs, substantially more than their money. 

Some people might expect a 'but...' at this point, unfortunately one is not coming. 

When looking at Centro there are some pointers to a dark future and some pointers to a light future. 

On the light side, there is still $2.4bn of equity on the balance sheet ($2.82 per share), an NTA of $1.31, there seems to be strong interest in asset sales, we have a capable management team and what appears to be good income from existing assets.

On the dark side, Centro is grossly overleveraged due to the US acquistions, we have a softening global economy especially in the US where Centro has 2/3 of their assets, severe reputational damage, the inability to take out new hedge positions, litigation risk and falling asset values.

At the end of the day, in the absence of any really hard information from the company, we are all weighing up the relative strengths of light and dark and allocating capital accordingly.

One would have trouble denying there is a positive bias in the CNP HC forum, perhaps overly so given the risks involved. 


As far as my personal opinion is concerned:

I am often sceptical of the motives of.. well everyone really.. but especially people who have a vested interest in selling their story. To this end, I pay little attention to business articles written in newspapers, unless they are written in a way that allows me to check their information. To date, the ability to do this is sadly lacking. We see many articles, but they often refer to unnamed people close to the business or unnamed analysts. 

I do take notice of analysts who have credibility and back their research up with facts; not because I am prepared to take their opinion on face value but because I use their fact-based arguments to check or enhance my own. I have yet to see a credible analyst come out an put their name to the statement "Centro is definitely going to go bust, because....". Believe me, if someone like Rob Stanton from JP Morgan or Andrew Rosivach from Credit Suisse did this, I would be on the phone quicker than.. well, a very quick thing.. to find out why and adjust my own thinking if it had merit. 

To be fair, I have not seen an analyst put their name to "Centro is definitely going to survive because..." I've seen plenty of analysts slap a 'sell' recommendation (usually backed up with a 'because') and a few like Macquarie who have said, in essence, they really don't know what the company is worth (hence the '0-50c' earlier in the year which I think was recently changed to a '50c'). Has anyone actually seen fact-based research which suggests the company is doomed? Please post it here if you have.

As far as the banks are concerned, they may well be looking after their own interests by allowing Centro to continue to trade to pay out the debts. In fact, I'd say they definitely are. 

The lenders have made provisions for loss, but I have not seen any of them actually book a loss as yet. If you know of one, please let me know. They will want to do everything they can to make sure this doesn't happen so the provisions can be written back to P&L in the future.

The fact that lenders have allowed the company to continue to run the assets is a big pointer to the future in my opinion. The banks could easily of moved an administrator in to run the business and achieve the same outcome, but after 5 1/2 months they haven't and they don't look likely to do so either. Centro outlined a plan day 1 and they have stuck to it all the way through.

One final point to note is a subtle but significant one...

We have a board of independent directors who are bound by very specific duties (to shareholders and in times of trouble creditors as well) under the corporations act. They are still in one piece and we've not seen anyone bail during the crisis (unlike basket case casualties like AFG or MFS). This is not some tin-pot little Pty Ltd company we are dealing with here. Both CNP and CER are high-profile distressed businesses part of the ASX-100 (CNP) and ASX-200 (CNP, CER) indices. If you think ASIC, ASX and every other relevant regulatory body hasn't been deeply probing into CNP and CER affairs and accounts in the last 5 months, you are probably mistaken. Despite this we have seen no director resignations, no mention of insolvent trading, no public action against the company or directors from ASIC, the ASX or any other regulator. Even the class actions are based on misleading conduct not claims of insolvency.

So, at the end of the day I genuinely hope you can say 'I have / haven't bought xxx shares of CNP because..." and list you reasons. Hopefully none of them are not based solely on what you have read on HC.


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## tulasi74 (1 June 2008)

Thanks for the post Dingo.  I agree that its a worthwhile read.  While the poster does not make a call either way, the bias at the end is definitely a positive one.


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## dingo37 (1 June 2008)

yes tulasi74,

i agree and there are a lot of others who believe that this stock should/could have a positive announcement on monday before/at opening.

cheers


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## MU002 (1 June 2008)

I am a supportor for Centro. around my living place, there are two Centro shopping centers, the Brandon park SC and the Glen SC. I trust Centro's business because I can see how well their business is everyday. before I invest in cnp, I read every post of this forum and talk with a friend trading share for years. of course I also check advice from my brokers like etrade and nab online trading. at the beginning, I bought small stake in cnp at 55c, shortly after, I feel the price could go down further. then I quit and wait until it reach 30c, and it came a big decision to me when I see I can afford to buy 1 million Centro shares. after thinking by all of my knowledge for weeks, I gradually accumulated 1.6 m shares and hold until 5th of May. so I hope you can feel how serious I am as a Centro holder. I give those Centro supportors my reasons to buy cnp according to my semi-professional acadamic background.

from the general economy point of view, the U.S recession is part of a political stratagy to depreciation the US dollar. because US has a huge financial deficit, a weak currency policy can save tremendous liability for the whole US ecomomy. that's why the US banks did the writen off their debts so easily, you know who is the biggest investors in US bonds and those credit securities? countries have great funds reserve like China and Japan. US Banks do occur big loss, but it get comensation from the government. See what happens to Bear Stream? this is not the case in Australia, we are not going to share any cost for the US economy. So you wont see major banks wind up Centro so easily. beyond this, Centro is also a perfect take over target to anti recession because of its ability to hold value. if you are sacred because US properties are losing value, then tell me something can keep value better than properties like shopping centers. rember, SC has big block of land and can generate stable rental incomes.

As to accounting perspective, we need to understand a "book value loss" is not as severe as a revenue loss. Centro's cash flow statement didn't show any operation problem. the book loss wont be a real loss until the company go bankrupt. I guess the assets written off  actully give banks less incentive for a wind up.

for the valuation thing. the truth is that every valuation you see from anywhere is just a estimate. for such a comprehensive entity like Centro, value only apears after it is sold as a whole. if you think Centro cant leave any value to shareholders. then just dont trade BHP or WOW as well, they definitly gonna leave nothing to shareholders if you check their price and the assets back.

of course Centro is risky. we know the banks have the right to wind it up at any time. that's why I sell 90% of my shares before any ann. and buy back after that. I know normally the ann is "good", because cnp or cer priced at the worst senario. it could only go better. and if you cant take risk, cer is less risky because its direct ownship over shopping centers. you need to have a very long view on Centro. to repay debts, Centro may not pay any dividend in 1 or 2 years. how long you can afford to hold? if no one come to buy a large enough stake in Centro, the price will stay low for years. 

If nothing worse happened, Monday will see another extention until the end of the year. we need a little bit faith here to be with Centro. If Centro survive, it's a big achievement for aussie ecomomy. because, only because Centro is in Australia, it get the hope to stand.


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## vida (1 June 2008)

Well from what I've read so far online on news articles the announcement is already known to be positive, that extension is granted to later in year. I don't think that is uncertain, it was just a matter of paperwork etc and terms to be settled that they did not get to this point a few weeks ago, otherwise it was a given that it would happen. The media always exaggerate any delay and love to instil panic that makes more people want to create action and hype doubt for the purpose of scoring attention. I call it self-serving media commercial manipulation and that's how it survives. The media has to get its stuff read and if its boring no one will read it so they have to jazz it up.  

The only thing keeping the SP down at the moment is the litigation issues.  These are unbelievable because if the litigation succeeds the litigants have no hope of getting anything as the bank are the priority creditors. Even if the litigants get as far as a judgment in their favour they cannot make CNP pay them anything and if they want enforce judgment and send CNP into liquidation they again won't get anything as the banks have priority.  

They won't get as far as a win in court anyway as CNP will defend and win I believe - there may be some settlement CNP will offer to make it all go away long before it gets too far off the ground and a compromise will be agreed to. That's the only way the plaintiffs will get a cent and it doesn't matter what they claim, their $700 m or $2 bill they have no way of getting any of it.

That's how I see it and its only logical in my opinion.  The lawyers 'no win no fee' thing if that is what they operate on is a furphy. They will take most of the settlement when the compromise is reached and the investors won't know what hit them then.  The funding agreement is full of terms and conditions and there are no guarantees of any outcome. It is a gamble 4them.

However the market is not ignoring the litigation issues as otherwise the SP would be around .50 right now.  Well lets hope it lights up the market 2morrow


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## vida (2 June 2008)

is this true - the age says today;

Centro back on the edge
sCOTt Rochfort 
June 2, 2008 

CENTRO Properties Group's chances of survival have taken a major blow, after the shopping centre owner's bankers failed to agree on the terms of a proposed extension to a $2.3 billion debt facility.

Despite Centro expressing confidence last week that it would be given more breathing space to repay the debt, by late yesterday it is believed the company had still failed to secure an extension to the facility after a key deadline passed on Friday night.

Centro yesterday declined to comment on its discussions with the Australian-based lending group.

It is unclear if the company will also come out of last week's trading halt. Nor have there been indications whether the banks might extend the Friday deadline.

In a statement to the ASX last month, Centro warned its "further extension arrangements may be terminated" if a deal between its creditors was not finalised by last Friday. The only thing that might get Centro a reprieve is if it can announce some quick and ready asset sales. The company owns 800 shopping centres in the US and Australia. Centro's debt woes largely stem from the acquisition binge undertaken by its former chief executive, Andrew Scott.

Spokesman Jim Kelly declined to comment on possible consequences of the banks' failure to approve the extension of the debt to December 15, which would have given the company more time to offload some of its shopping centre assets in Australia and the US. On top of the $2.3 billion debt facility, Centro needs to extend the expiry of $US450 million ($A470 million) in bonds owed to US noteholders.

It is believed the banks ”” which include Commonwealth Bank, BNP Paribas and ANZ ”” have so far failed to agree on how the proceeds from the sale of Centro's shopping centres would be distributed among the syndicate of lenders.

Failure to extend the $2.3 billion debt facility is likely to push the company ”” which owes a further $US1.1 billion to a US lending group ”” over the edge.


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## metric (2 June 2008)

i think the journo is on crack. how could he know behind closed doors, market sensitive information? 

there is another article in the afr that says they got the ext. so take your pick....i'll wait for the ann.


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## Santoro (2 June 2008)

metric said:


> i think the journo is on crack. how could he know behind closed doors, market sensitive information?
> 
> there is another article in the afr that says they got the ext. so take your pick....i'll wait for the ann.




Looks like they are changing their story....
"_Centro to wind up syndicate early
02 Jun 2008 | The Australian Financial Review | Mathew Dunckley 

Rising borrowing costs and the strong Australian dollar have forced the premature winding up of a Centro Properties Group's managed syndicate._ "


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## MU002 (2 June 2008)

if Centro is in some trouble about the extra loan facility, result should come out later, maybe Tuesday. if there is any ann today, the worst would be sale of Centro's major shopping centers. Banks are trying to sell Centro's assests anyway, why shouldn't they wait a bit longer and get much better price? it's good we are in trading halt, so nothing to worry about.


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## vida (2 June 2008)

I read the positive article too but there are several repeating the negative news.  The AFR is the only positive article, the HeraldSun etc are negatives. We know who to believe if there is a choice on media reputation!!! AFR : lets hope it is the case, they do not sensationalise as the rabble media


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## sam76 (2 June 2008)

Just out

Centro Confirms Extension of Financing Arrangements to
15 December 2008
Centro Properties Group (Centro) announced today that additional liquidity facilities
have been provided by its financiers and $2.3 billion in aggregate owed to the
Australian lending group and US$450 million owed to US private placement
noteholders are confirmed as extended to 15 December 2008.
The US lending group has reconfirmed the extension of the US joint venture facilities
to 30 September 2008 as a result of finalisation of the matters outlined above.
Certain inter-creditor arrangements have also been agreed between Centro’s
financiers. Finalisation of these matters was required under the extension of
Centro’s financing arrangements announced on 8 May 2008.


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## vida (2 June 2008)

Aha !!! The media who rushed out the premature negative news will be stuck as printed versions cannot be altered today, but online of course they will be doing a fast retrace of their mistakes. What kind of journalism is that??? Gosh!


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## gensis1 (2 June 2008)

vida said:


> Aha !!! The media who rushed out the premature negative news will be stuck as printed versions cannot be altered today, but online of course they will be doing a fast retrace of their mistakes. What kind of journalism is that??? Gosh!




I think i'll wait till the asset sales are announced..today will be mixed reactions thanks to good job by hopeless journo's..


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## nioka (2 June 2008)

Financing arrangements confirmed. Cnp now have some breathing space to put some value back into the business.


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## MU002 (2 June 2008)

Looks price gonna be stable around 40c for a while, until some news comes. I always feel pity when the price surge after ann. but I choose to take less risk not to hold too much before any ann because I took so much risk at this March already. So happy to see the price rise, at least I am still holding some cnp and cer


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## vida (2 June 2008)

Clearly the market is not impressed with the financing arrangements to date even if it is not too negative.  The uncertainty, the media is selling the gloom and pandering to fear and the litigation all work towards spooking investors/traders who want to get out. I think people selling today many would have made a loss or small profit, and I guess they don't want to be at risk any longer.  Oh well I am holding and holding ... hmmm


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## vida (2 June 2008)

I wish I'd seen this article below before the media negativities which made me feel a bit ill.  I would think the media this morning caused an avalanche of sell orders to be posted which were set off when the trading halt was lifted. The media should be held responsible for their lack of integrity and ill informed panic reporting upsetting people unnecessarily.  This is disgraceful journalism.

***********************************
Centro says reports loan deal not agreed are wrong
Sun Jun 1, 2008 7:41pm 
More Business & Investing News... Featured Broker sponsored link
 #1 FX Broker - Shares Mag 2007 MELBOURNE, June 2 (Reuters) - Centro Properties Group (CNP.AX: Quote, Profile, Research), one of Australia's highest profile casualties of the global credit crunch, said on Monday newspaper reports its banks did not agree on loan conditions was wrong.

The Age and Sydney Morning Herald newspapers said on Monday that Centro's bankers had failed to agree on conditions that would allow an extension on about A$2.8 billion ($2.6 billion) of debt.

A Centro spokesman said the report was absolutely wrong.

Although banks agreed earlier this month to a loan extension in principle, it was dependent on a number of conditions being met, including the banks agreeing to the process for refinancing or asset sales.

Centro, which owns about 700 U.S. shopping malls, borrowed heavily last year to fund a rapid expansion in the U.S., but ran into trouble after credit markets dried up and it was unable to refinance expiring debt. ($1=A$1.05) (Reporting by Victoria Thieberger) "


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## wilko66 (2 June 2008)

I contacted The Age via email to ask how such an erroneous article made it into the paper.  As yet not I've not had a reply...surprise, surprise.  The agenda, as noted in many previous posts, seems patently clear.  

Incorrect and unsubstantiated opinion presented as a news-item fact in the early pages of a major business broadsheet can be very damaging.

I rarely get off my butt to do things like that but encourage all who feel equally   offended to contact them and let them know.


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## zebop (2 June 2008)

Yes the media is not helping with the SP however until the big investors come back into Centro I believe the share price will continually be sucked down by short term traders. As soon as SP goes up and everyone here gets excited, it inevitably drops back again as though it cannot escape the financial quicksand.

I have small investment but think it's time I placed my shares into the bottom drawer and leave it for quite a few months.


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## QIIIIQ (2 June 2008)

Thought this might be of use. My apologies if someone has posted. I find the first paragraph very interesting. I hold CNP.

1:27 PM, 2 Jun 2008 Robert Gottliebsen
Beware Centro furphies

Some daily press journalists covering the Centro affair are having great difficulty understanding the key issues facing the Centro Group and its CEO Glenn Rufrano. The articles are often inspired by those who are looking to buy key Centro shopping centres cheaply or who want to manage a slice of the group. 

If Centro offers a large number of its shopping centres to rival shopping centre managers, the likelihood is that ANZ, Commonwealth, National Australia Bank, St George and the other banks who have loaned more than $2.5 billion to Centro Properties, unsecured, would receive a battering. The only way they can get their money back is to sell the shopping centres to investors who will allow Centro to continue to manage them. That retains value in the Centro shopping centre management operation which in time can be realised to enable the banks to be repaid and/or end up with partial Centro equity.

The value of Centro shares comes from the fact that if the banks pull the rug and appoint an administrator then the Centro shopping centres management contracts will fold and become worthless. The banks will lose a fortune. So they have to find a way that offers Centro Properties and Centro Retail shareholders value, so as to retain value in the banks’ unsecured loans to Centro.

There was never any doubt that the banks would agree to the latest extension, although one or two of the smaller lenders may still have trouble grasping their predicament and hope the major Centro bankers will buy them out. The lesson for all those involved in Centro is that when they read an article in the daily press that does not take account of the forces outlined above, be wary – it’s likely that it contains error.

Of course I must emphasise that Centro is a very delicate game and there is a lot than can go wrong, because a way has to be found to restructure the Centro group. Reconstruction is made possible because Centro is actually a excellent shopping centre manager both in Australia and the US. However, longer term the shareholder writs will be a destabilising force.


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## mapna (2 June 2008)

I think the mistakes/errors from some of the media reports today has damaged the CNP sp today. People are confused about news on diff. papers this morning. Wonder if anything can be done to those articles writers????

Next few days movement of CNP would confirm the direction of it. Today's movement did not give a good impression on CNP. Maybe short term traders lost their patience and move funds to other stocks????

I cleared my position this morning, sit back and watch it for few days to see if I should come back in ????

It would be no excited news for a while or until assets are sold????

IMHO - DYOR >>>


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## vida (3 June 2008)

I think the SP is going to dangle low for a while until assets are sold and some debt paid down.  Once the balance sheet starts to improve the company will move well away from the brink as the media calls it, and the SP will reflect the market's confidence. It seems CNP already has the bank's confidence as it keeps getting refinancing extensions so I think its going ok. At present its probably a great buying opportunity that, once the sales are done and debt is reduced, we may  never see the likes of again. I am hesitant of course to buy more although I did at .26cents.  However i am always more hesitant to sell any of my portfoio than I am to buy.  It seems a buy decision is less difficult than a sell and with CNP in particular.  If the SP goes lower than .30 i will definitely again buy more.


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## gensis1 (4 June 2008)

"A decision on CAF will be made within the next 30 days"...this is from centro's may 8th ann. on interim extension..so i think we can expect an ann. soon,because 30 days is to 7th june...this sat...here's hoping they get book value or close, but more importantly retain management rights..better for paying off more debt and for dividens payable in the future.


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## mapna (6 June 2008)

CNP is removed from ASX 100 today ... SP continued to head south ... been watching this stock for sometimes and its getting worse even on the green day of the market ... I wonder what is the real value of it ???? slowly free fall everyday ....

IMHO.


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## tulasi74 (6 June 2008)

There are some out there that say that there is no value in the company.  Yet they have been given every opportunity to survive until at least September 30 and most probably December 15.

Only good announcements of assets sales will make the share price climb.  By good announcements, I mean announcements where they have sold assets but retained management rights or even if management rights are not retained, they have sold close to book value.

It appears that the CEO is also looking at equity injection but at current share price it will be very dilutive to existing shareholders.

What CNP needs is good assets sales to reduce debt and for share price to start climbing.  If they continue to show that they can survive and be profitable, then slowly investor confidence in the group will return and share price will climb.  If share price climbs, then it will increase their chances of reducing the damage on litigation, assuming that there is going to be some damage, because shareholders might be pacified with a smaller settlement to end the lawsuit.

Lots of unknowns.  For now I am looking at bollinger bands which have narrowed significantly which could be a signal of an imminent breakout.  Given that news on the sale of their stake in CAF was due within 30 days of when the announcement was made which was on 8 May and CNP have a history of waiting until last minute to make announcements, I would say that share price may start climbing next week.  This is only IMHO and please DYOR.


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## sanj (6 June 2008)

Centro MCS Confirms Refinancing of $331 Million Facility
Centro MCS today confirmed it has completed an agreement to refinance a $331 million
debt facility for eight syndicates. The facility has been refinanced for two years and will
mature in April 2010. Additional funding for forecast operational capital expenditure during
the loan term has also been approved.


Will this have much of a impact on the price Monday mornining....Any ideas?


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## yang (7 June 2008)

sanj said:


> Will this have much of a impact on the price Monday morning....Any ideas?




as it is a public holiday Monday, probably not  and after the dows performance last night I am glad it is --> lets hope the dow does better Monday or we get an good announcement (not that even that seems to make a difference of late) from cnp

also, with regards to the announcement you're referring to, I believe centro does not own these, but only manages them --> so I reckon it will have little/no effect

cheers,

yang


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## tulasi74 (7 June 2008)

yang said:


> as it is a public holiday Monday, probably not  and after the dows performance last night I am glad it is --> lets hope the dow does better Monday or we get an good announcement (not that even that seems to make a difference of late) from cnp
> 
> also, with regards to the announcement you're referring to, I believe centro does not own these, but only manages them --> so I reckon it will have little/no effect
> 
> ...




It may have little effect on the SP going forward but all refinancing and all efforts made by CNP to maintain its revenue base is important.  As manager of the properties owned by the syndicates, this provides assurance that management revenues from the properties owned by the syndicates will not be impaired.

This could also impact on any efforts that Centro makes to set up new syndicates consisting of some of the key properties held in the Centro Australia Wholesale Fund. A business spectator article suggested that one of the ways CNP could retain management rights to some of the bigger and more important properties in the Centro Australia Wholesale was to sell 50% ownership in them to new investors through new syndicates and Centro owns the remaining 50%.  This way CNP reduces its debts through effectively new funds under management but maintains revenue at the same levels.  Successful refinancing for existing syndicates could improve CNP's ability to set up these syndicates.  Any announcements on any success in that area will have a positive impact on the share price.

The only reason the share price hasn't risen on the back of the positive announcement from the Dec 15th extension is because of the increased claims from shareholder lawsuits. Had the banks been concerned about this and the effect it would have on what they can get back, I don't think they would have supported the extension on May 30.  The fact that they have continued to support CNP could be because they think the strong asset backing that CNP has will pay dividends in the long term and they must be assured that the new CEO has the situation under control and the restructuring plans he has in place will eventually see the banks get their money back.  From the banks perspective, if they let CNP keep surviving, their revenues will just be sufficient to meet the cost of debt so they are not losing anything yet.  Its only the shareholders that are losing as they are not getting any dividends from their investment.

Lets hope that CNP survives and reaches the levels it reached in February last year.


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## vida (7 June 2008)

Centro has extra liquidity; JV facility extended to Sept 30
TOP News

Source: News Bites

Centro Properties Group announced additional liquidity facilities have been provided by its financiers and $2.3 billion in aggregate owed to the Australian lending group and $US450 million ($A469 million) owed to US private placement noteholders are confirmed as extended to December 15, 2008.

The US lending group has reconfirmed the extension of the US joint venture facilities to September 30, 2008 as a result of finalisation of the matters outlined above.

Certain inter-creditor arrangements have also been agreed between Centro’s financiers.

Finalisation of these matters was required under the extension of Centro’s financing arrangements announced on May 8.

Certain financiers had previously provided a liquidity facility and other support to Centro totalling A$55 million. Additional liquidity facilities and other support totalling $100 million have been arranged with Australian financiers and US private placement noteholders. Centro now has $155 million in liquidity facilities and other financier support.

Ongoing fees and margins of 3.75% per annum are payable on the liquidity facilities. Otherwise, interest margins payable by Centro during the extension period remain as previously announced.

The extension remains subject to the conditions outlined in Centro’s announcement of May 8 whereby the following must occur by September 30, 2008:

the Australian financiers and US private placement noteholders to be satisfied as to Centro’s progress in implementing its strategic plan;

the US lending group, which is owed in aggregate $US1.1 billion associated with Centro’s joint venture with Centro Retail Trust, agreeing to further extend those facilities from September 30, 2008 to a date no earlier than December 15, 2008;

and the Australian financiers, US private placement noteholders and the US lending group reaching a further agreement by September 30, 2008 on the terms on which assets can be sold and the proceeds of such sales applied after that date.


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## tulasi74 (8 June 2008)

Hey Vida

I also read the article that you posted last.  Did you find any new information in it from what we knew on Monday after the announcement by Centro confirming extension to December 15th?


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## $$Punt$$ (12 June 2008)

tulasi74 said:


> Hey Vida
> 
> I also read the article that you posted last.  Did you find any new information in it from what we knew on Monday after the announcement by Centro confirming extension to December 15th?




Don't understand why there is still no announcement/ updates by CNP despite earlier promise. Make investor lose faith in CNP.


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## vida (12 June 2008)

The market has lost faith in it today it seems. Gosh its fallen to its lowest for a while and it is a bit scary to see but I am used to it now after seeing the peaks and valleys over past months.  Its usual for CNP not to announce anything until whatever progress they are making has been taken to a certain stage, a deadline of something. While things are still being sorted out and asset sales are being worked on they won't announce anything much until something is signed on the bottom line i would think, or close to that.
So we have to either hold and be patient or buy more and be patient or sell.
Its our choice isn't it?  I will see what the next few days brings and decide. The whole market is floundering at the moment its not only CNP, everything.


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## $$Punt$$ (12 June 2008)

How low can it go? It has lost 6 cents for the last 2 days to 28cents today at closing. I have bought heaps and more today but worry it might collapse and suddenly go into receivership despite all those debt extension to December. Then I will lose everything. That happened to me in Chemeq (CMQ). It would be good if CNP can update the market at least once a month in time of so much uncertainties and rumours. I hope it will make some positive announcement soon instead of all the negativities about the litigation.


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## yogi (13 June 2008)

Hear Hear $$Punt$$ need a +ve ann soon. Continuous small trades slowly pulling the SP down. With Confidence declining there is more sell than buy.
Its the end of the Fin year so the next 2 weeks might see a bit more of a fall. But the org is fundamentally viable and a recovery should be imminent. Probably in the 2nd week of July. (sounds like a horoscope)
Fingers crossed.


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## Eddyl (13 June 2008)

At times like this I think its a good time to sit back list the good and bad points about the company. Their certainally seem to be alot for Centro at the moment, with more and more institutions becoming jittery about funding.

What are the good points about this company?


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## tulasi74 (14 June 2008)

Eddyl said:


> At times like this I think its a good time to sit back list the good and bad points about the company. Their certainally seem to be alot for Centro at the moment, with more and more institutions becoming jittery about funding.
> 
> What are the good points about this company?




Good points are:

1.  Substantial funds under management providing stable revenues (for now)
2.  Apparently they are really good property managers
3.  Assets still exceed liabilities by 2.4 billion (from last financials).  Excluding intangibles and goodwill its about $1.8 billion
4.  Guaranteed survival until at least September 30 and possibly December 15
5.  There is talk that housing crisis in US, which was also supposed to impact on commercial property sector, may have bottomed so asset values may only be written down for the last time in August report
6.  Have already written down nearly 1bln in last financials so part of the writedown is already out of the way
7.  They have secured 2 year fund for 8 of their syndicates and only 2 or 3 syndicates have unresolved issues - increases the likelihood that they could create more syndicates using some of the more attractive property in the CAWF
8.  Two of their big lender banks, CBA and JP Morgan also have indirect equity exposure through investment arms (based on substantial holding notices)
9.  Recent news reported by the media (keeping in mind their credibility is a bit low after some of their blantantly misleading reports) on assets sales suggest assets could be sold for close to book value.  Article in this weekends papers also suggest that properties in CAWF might be sold but Centro may be able to retain management rights.  Investment arms of the banks that are owed money would be the ideal investors for these properties
10.  If property market doesn't deteriorate between now and December as initially feared and improvements are seen, the banking group's confidence in recovering their monies will increase and they may consider a longer term extension come December 15
11.  Confidence of banks in management team increasing based on the last longer term extension

Negatives

1.  Massive debt with cost of debt increasing
2.  Massive claims made by shareholders from litigation action
3.  Possible forced sale of assets preventing full market value being realised 
4.  Company itself has admitted that it may have wrongly valued assets which has dampened investor confidence on amounts stated in financials - this was in Centro NP (US arm of the company) so not sure if it affects other asset valuations.   
5.  Limited direct property ownership and high exposure to actions taken against the group as a whole
6.  Confidence of banks in new management team increasing based on the longer extension given
7.  If property market deteroriates further between now and September 30, the banking group may get increasingly nervous and may pull the plug
8.  July 25 is the next date for hearing on litigation case. Business Spectator article suggests that it could take 1 - 3 years and possibly 3 years.  UBS are one of the big shareholders and their loss would be in the hundreds of millions. UBS do not have any exposure to Centro but had close to 14% on December 17th. So an early resolution to the litigation case is not likely
9.  Loss of reputation and market confidence which will take a long time to build.

Best way to invest in Centro IMHO is work out how much you are prepared to gamble knowing you can lose it all and just hold it.  I know its not the same scenario but please have a look at the historical prices for ALL between Jan 2002 and July 2007.  Centro has the potential to do that too given its current price. Please DYOR.


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## mapna (14 June 2008)

CNP is losing faith from investors, not in the day traders eyes, out of ASX100, change of new top level of mgt. , let investors in the dark without ann. for sometimes ... more lawsuits comes out slowly ... what else??? 

Too many issues around CNP, SP keeps dropping .. but Mgt. still keeps quiet abt its progressing in assets sale ...... 

Very disappointed ... wonder how low it can go ????

IMHO... DYOR..


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## tulasi74 (14 June 2008)

Please don't misunderstand the `double whammy for Centro Properties Group' article published by Business Spectator on 11 June 2008. I believe it is merely a repeat of old news and is not a new lawsuit.

Republishing this news keeps the negative news at the forefront of potential investors minds. I believe that Centro are probably very advanced in any negotiations they are undertaking for asset sales but given that they have been reprimanded for lack of disclosure in the past they would be hesitant to make any announcements before anything is confirmed. The requirement to get banks to agree to any asset sales also means that it will take Centro longer than otherwise to finalise deals.

The SP has been going down but on low volume which suggests that only those who are not patient enough to hold for long term that are selling their shares.  The drop in the share price does not concern me as IMO, the chances of the share price rising slowly to the 60 - 75 cent mark before at least September 30 are quite good.  Long term their chance of survival in some form is pretty good.  Please DYOR and don't hold me to my prediction


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## $$Punt$$ (15 June 2008)

tulasi74 said:


> Please don't misunderstand the `double whammy for Centro Properties Group' article published by Business Spectator on 11 June 2008. I believe it is merely a repeat of old news and is not a new lawsuit.
> 
> Republishing this news keeps the negative news at the forefront of potential investors minds. I believe that Centro are probably very advanced in any negotiations they are undertaking for asset sales but given that they have been reprimanded for lack of disclosure in the past they would be hesitant to make any announcements before anything is confirmed. The requirement to get banks to agree to any asset sales also means that it will take Centro longer than otherwise to finalise deals.
> 
> The SP has been going down but on low volume which suggests that only those who are not patient enough to hold for long term that are selling their shares.  The drop in the share price does not concern me as IMO, the chances of the share price rising slowly to the 60 - 75 cent mark before at least September 30 are quite good.  Long term their chance of survival in some form is pretty good.  Please DYOR and don't hold me to my prediction




Let's hope you are right and everyone who so keenly followed up in this forum will share the success of victory for being patience when the SP rise to 60 cents and above mark. I already hold substantial shares in CNP bought over the last few days of trading between 28 cents and 34 cents. I dare not to buy any more CNP for fear of losing everything as mentioned earlier in my note. I wish everyone best of luck and hope not too long now before CNP start to rally again.......I think long overdue.


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## vida (15 June 2008)

The latest news publications say:

Mr Cooper denied that he was taking up a poisoned chalice.

"Brian's retirement and my appointment has come at a time when we have the extension from our lenders and we can now build on that confidence … and work on our strategic plan and an outcome that is favourable to stakeholders, lenders and our staff," he said.

"My job is to work with [chief executive] Glenn Rufrano. The board recognises we must simplify the Centro structure in an orderly manner and preserve the value for stakeholders."

Centro was granted an extension to repay $4.2 billion in debt by December 15, provided it made every effort to raise cash through assets sales and an equity injection.

Mr Rufrano has been in the US to line up the sale of Centro's stake in the Centro America Fund, worth about $1 billion, and is said to be close to finalising a deal.

In Australia, buyers are said to be looking at individual assets, such as the flagship Glen shopping centre in Glen Waverley, Victoria, rather than taking a stake in a portfolio of 25 centres, but keeping Centro as the manager.


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## wilko66 (16 June 2008)

Most articles today are referring to the interest of Julius Coleman in the  services aspect of the Centro business.  

http://www.theaustralian.news.com.au/story/0,,23868441-25658,00.html?from=public_rss


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## gensis1 (16 June 2008)

It is now way past the 30 days decision period from may8 ann. on the sale of CAF..can anyone shed some light on why centro hasn't at least updated the market on, 'why a decision was not made in this time frame' as stated by the group....this to me shows a lack of concern,by the group, to its shareholders ...people are losing faith because of this..its no wonder share price is diving.
Would this come under continuous disclosure laws???


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## wilko66 (16 June 2008)

Hi Gensis,  

Given the range of potential scenarios Centro currently sits in wrt CAF, the wording "A course of action will be decided over the next 30 days" gives plenty of wriggle room wrt disclosure aspects but I agree it's lax.  I sent an email to Centro early last week on just that point and got a somewhat canned response.  The following excerpt is the para they used to answer that specific question.  It is unaltered from how I received it.

"We continue to work with various interested parties to determine the best outcome in the interests of investors. The recent financing extensions give us flexibility and time to do this. We will provide a further update as events warrant."


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## wilko66 (16 June 2008)

I think users need to register with business spectator to view this.  It's worth a read.

http://www.businessspectator.com.au/bs.nsf/Article/Centros-road-to-recovery-FN58J?OpenDocument


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## gensis1 (16 June 2008)

wilko66 said:


> I think users need to register with business spectator to view this.  It's worth a read.
> 
> http://www.businessspectator.com.au/bs.nsf/Article/Centros-road-to-recovery-FN58J?OpenDocument




This article is full of "ifs"...lets not forget that apparently the offers coleman has made, is over the last four months...which tells me he wants to purchase mcs syndicates for a song or buy them back for a fraction of what he sold them for..


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## gensis1 (16 June 2008)

wilko66 said:


> Hi Gensis,
> 
> Given the range of potential scenarios Centro currently sits in wrt CAF, the wording "A course of action will be decided over the next 30 days" gives plenty of wriggle room wrt disclosure aspects but I agree it's lax.  I sent an email to Centro early last week on just that point and got a somewhat canned response.  The following excerpt is the para they used to answer that specific question.  It is unaltered from how I received it.
> 
> "We continue to work with various interested parties to determine the best outcome in the interests of investors. The recent financing extensions give us flexibility and time to do this. We will provide a further update as events warrant."




Can someone explain why centro had the '30 days' 'course of action'deadline at all, on the may 8 ann.
was it to satisfy the banks?
was it to satisfy shareholders?
was it an offer on CAF that had a 30 day limit?


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## wilko66 (17 June 2008)

gensis1 said:


> This article is full of "ifs"...lets not forget that apparently the offers coleman has made, is over the last four months...which tells me he wants to purchase mcs syndicates for a song or buy them back for a fraction of what he sold them for..




Agree that could be the case but it could equally be interpreted more positively; however low the initial bids....and if there were several then it's fair to assume they were incremental...Centro has not jumped to take them up implying that confidence in the rescue plan/strategy from the banks, board and management remains solid. 

The story still bubbles...

http://www.theaustralian.news.com.au/story/0,,23875025-25658,00.html?from=public_rss


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## gensis1 (17 June 2008)

I guess centro's sp. has some saving grace today,comparing the news of asset sale at allco and its sp. rise from this morning at 28c to a high of 57.5c on ann.(allco had been given two 30day extensions)
It seems with the extra time centro has been given,the company now,isn't in any real hurry in selling assets,and they might be trying to negoiate an even better position on the sale program.(hence the email from centro.. wilko66..posted).I just hope they again, don't leave it to the last minute...


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## $$Punt$$ (17 June 2008)

gensis1 said:


> I guess centro's sp. has some saving grace today,comparing the news of asset sale at allco and its sp. rise from this morning at 28c to a high of 57.5c on ann.(allco had been given two 30day extensions)
> It seems with the extra time centro has been given,the company now,isn't in any real hurry in selling assets,and they might be trying to negoiate an even better position on the sale program.(hence the email from centro.. wilko66..posted).I just hope they again, don't leave it to the last minute...




I hope when CNP make the announcement, it would be around 1pm trading time like Allco did today about the sale and NOT after trading closed or weekend. This will trigger massive price jump as punters like myself will jump in followed by other big players soon after announcement, no time to think. Lets hope the big announcement is sooner than later. Lets also hope CNP will update the market at least once a month or better still every fortnight (wishful thinking) to keep the momentum going.


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## wilko66 (19 June 2008)

Not much said in the following article from The Aus but doesn't really give much indication there'll be any announcement soon.

http://www.theaustralian.news.com.au/story/0,,23885710-25658,00.html?from=public_rss


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## gensis1 (19 June 2008)

What has happened to all those so called bids/offers on centro's assets, the press was speculating about weeks and months ago..they've all failed to materialise...is it because; those bids/offers were at fire sale prices?..or..they've  mostly been withdrawn,because centro aren't under any pressure at the moment to sell..or..centro has one big offer(for the group) on the table and are using that as leverage for other individual bids on assets to restructure..who knows? meanwhile sp. keeps diving on no updates...


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## Quixis (19 June 2008)

gensis1 said:


> What has happened to all those so called bids/offers on centro's assets, the press was speculating about weeks and months ago..




Except for the one journo who we all know has a clue, that's RG, all the other "journalists" are as valuable or worthwhile to exist as t1ts on a bull.


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## gensis1 (19 June 2008)

CNP announce zip, $0.00,zero dividens to 30 june ...yet CER get $0.014/share to 30june...how fair is that....CER rose to 41.5c on ann. lets hope value is preserved on CNP when and if they restructure...


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## nioka (19 June 2008)

gensis1 said:


> CNP announce zip, $0.00,zero dividens to 30 june ...yet CER get $0.014/share to 30june...how fair is that....CER rose to 41.5c on ann. lets hope value is preserved on CNP when and if they restructure...



 Under CER's constitution all profit must be distributed. Remember that the banks are major holders as is CNP. Most of that dividend will end up with the banks one way or another and is one of the reasons both CER and CNP are still operating. It is because CNP and CER are still operating profitably that they have been able to refinance. CNP's dividend for me will be when the SP reaches my target price of 60c and the bigger the dividend that CER can pay then the sooner it will get there. I'm happy with "zip" dividend. I just want to see some debt repayments.


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## gensis1 (19 June 2008)

nioka said:


> Under CER's constitution all profit must be distributed. Remember that the banks are major holders as is CNP. Most of that dividend will end up with the banks one way or another and is one of the reasons both CER and CNP are still operating. It is because CNP and CER are still operating profitably that they have been able to refinance. CNP's dividend for me will be when the SP reaches my target price of 60c and the bigger the dividend that CER can pay then the sooner it will get there. I'm happy with "zip" dividend. I just want to see some debt repayments.




Ok..CNP must also distribute all profit,according to their constitution,but CNP have taken the majority blow of the extra fees/charges/costs of refinancing/restructuring..and at the end of the day this has impacted the sp.  (CNP fall on ann.)(CER rise on ann.)If CNP had announced a dividend i'm sure the sp. would have been closer to your target price than where they're at now...How can we be sure that the restructure on sale of assets won't favour CER over CNP..?


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## $$Punt$$ (19 June 2008)

Fuming mad.....watch CNP SP go south while CER go up with latest announcement. Thought for a sec that SP will skyrocket when CNP stock suspended for announcement but instead more negative news. 2moro news headlines will see more negatives so expect SP to dive and thannks to brilliant journa.


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## sonicwind (19 June 2008)

Relax $$punt$$, the small CER dividend is nothing to get excited or mad about, the big picture will only change with asset sales. 

Look at this from a different perspective: the chance of SP moving up tomorrow is 50% where as the chance of Centro's survival is greater than 50%, we bought CNP because of the latter. 

So hold on to your investment and try to enjoy the long journey.


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## $$Punt$$ (19 June 2008)

Thanks for your positive outlook. Actually looking at buying more CNP at this bargain price. How much worst can it get? I think its worth the gamble....high risk = high returns


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## nioka (20 June 2008)

$$Punt$$ said:


> Thanks for your positive outlook. Actually looking at buying more CNP at this bargain price. How much worst can it get? I think its worth the gamble....high risk = high returns




This week there probably will be a lot of sellers of CNP who will lock in tax losses before the end of the financial year. Unless those holders are all ready showing a loss!!!! and don't need any more deductions. You have to sell to realise the loss. It could get worse before it gets better.


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## rub92me (20 June 2008)

$$Punt$$ said:


> Thanks for your positive outlook. Actually looking at buying more CNP at this bargain price. How much worst can it get? I think its worth the gamble....high risk = high returns



No disrespect intended $$Punt$$, but the above assumption that 'high risk = high returns' is exactly why so many people get burnt in the stock market.
In my book High risk = the very real possibility and high probability that you will lose all your money, a small chance that you'll lose half of your money, a tiny chance that you won't lose anything and a miniscule chance that you'll make money.


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## vida (21 June 2008)

Low risk can = high returns but it may take a bit longer. The secret to good investing with high profitability is careful selection and patience, not high risk.  Occasionally we can be excused for dabbling in a high risk number for the excitement and possibility of making high returns in short time, but only when we can afford a loss just in case.  I have learnt this the hard harsh way


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## $$Punt$$ (23 June 2008)

vida said:


> Low risk can = high returns but it may take a bit longer. The secret to good investing with high profitability is careful selection and patience, not high risk.  Occasionally we can be excused for dabbling in a high risk number for the excitement and possibility of making high returns in short time, but only when we can afford a loss just in case.  I have learnt this the hard harsh way




Accumulating another 100,000 CNP shares today hoping the saying is right, Buy Low and Sell High. Taking a big gamble guys! No venture No Gains, No guts No glory....sound familiar?


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## prawn_86 (23 June 2008)

$$Punt$$ said:


> Accumulating another 100,000 CNP shares today hoping the saying is right, Buy Low and Sell High. Taking a *big gamble *guys! No venture No Gains, No guts No glory....sound familiar?




Sounds like a gamble to me. Have you done analysis or are just buying because it used to be a lot higher?

There are plenty of stocks out there with profits, no debt or legal actions, trading on low PEs etc etc, personally i would rather hold the others...


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## MU002 (23 June 2008)

the foundamental of Centro hasn't changed much during recent SP decline. as the whole financial sector get the botton again, now we see big chance for a moderate recovery. CER has a very strong support around 35c, because this is based on the 1.4c dividend, which brings investors 8% annual dividend yield. cnp doesn't make any distribution yet... but its valuation should not be too far away from CER. so I agree now it's a buy point for both cnp and cer. tomorrow is the EX dividend day for cer, sp could get lower a bit, if u want low risk, high return, cer is a better choice than cnp. cnp is just more risky than cer, and the return is higher. i think buying cer tomorrow is not a gamble at all, it's a very wise long term investment. if the SP doesn't drop under 33c, the market is confident about its future. the very bottom SP for cer should be 28c at 10% dividend yield. see what happens tomorrow. for cnp, cant calculate a bottom price, and the market give it a very safe price zone to buy, around 20c, you have nothing to lose. potential good news for Centro includes: good result of law suit, re-open of morgage security market, take over from outside, sale of assets. all these could happen before this Dec.


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## vida (23 June 2008)

$$PUNT$$ : good for you.  You must have a lot of spare cash. I would buy another 100,000 too if I had that much money lying around. I could buy 10,000 or maybe 20,000 and that would be the most cash I would give it, and I mean shares not dollars. I will see how the SP goes over next few days, then I may spend a few more thousand on it and hopefully have a very merry christmas on the profits, hmm


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## vida (23 June 2008)

Why do you say CER is low risk whereas CNP is high risk?  If CNP dissolves, crashes, burns etc. then so does CER no?  Doesn't CER's future depend on CNP's survival ?  How is it then please explain if you can without too much trouble. thanks



MU002 said:


> the foundamental of Centro hasn't changed much during recent SP decline. as the whole financial sector get the botton again, now we see big chance for a moderate recovery. CER has a very strong support around 35c, because this is based on the 1.4c dividend, which brings investors 8% annual dividend yield. cnp doesn't make any distribution yet... but its valuation should not be too far away from CER. so I agree now it's a buy point for both cnp and cer. tomorrow is the EX dividend day for cer, sp could get lower a bit, if u want low risk, high return, cer is a better choice than cnp. cnp is just more risky than cer, and the return is higher. i think buying cer tomorrow is not a gamble at all, it's a very wise long term investment. if the SP doesn't drop under 33c, the market is confident about its future. the very bottom SP for cer should be 28c at 10% dividend yield. see what happens tomorrow. for cnp, cant calculate a bottom price, and the market give it a very safe price zone to buy, around 20c, you have nothing to lose. potential good news for Centro includes: good result of law suit, re-open of morgage security market, take over from outside, sale of assets. all these could happen before this Dec.


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## MU002 (23 June 2008)

although cnp and cer belong to one group, the Centro, they are seperately listed. I read from here that cer has direct ownership over properties and cer has smaller US exposure. maybe that's why cer can still make distribution, because the US asset valuse loss in cer is less than in cnp. in the worst case, banks make a fire sale after this Dec, cer investors have bigger chance to have some money back, because the portofolio is much smaller and higher tangible assets back. that's why i think cer has less risk. the recent dividend give cer some base to do a valuation, and cnp still has not. the SP itself is telling us that cer is safer than cnp with high price and less volitility. a safe price for cnp still need to be determined by the market. but the price for cer has much more certainty. I sell my cer today and wait to see the SP tomorrow. but I buy more cnp today because I still have confident in the commercial property value and most important, cnp is so cheap now. I can afford to hold for years, and buy more when the SP get even lower. make ur decision according to ur own situation.


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## gensis1 (23 June 2008)

if CNP hits the wall so does CER..don't understand how it can be any different at this stage...
...lets not forget the court hearing on the 27 june...this friday..i would sell thurs and buy friday..both CNP and CER will surely dip on friday's media flogging..(this is if no ann. about asset sales is made before then)


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## $$Punt$$ (23 June 2008)

vida said:


> $$PUNT$$ : good for you.  You must have a lot of spare cash. I would buy another 100,000 too if I had that much money lying around. I could buy 10,000 or maybe 20,000 and that would be the most cash I would give it, and I mean shares not dollars. I will see how the SP goes over next few days, then I may spend a few more thousand on it and hopefully have a very merry christmas on the profits, hmm




Hey Vida, 
I wish you good luck and other investors/ punters and hope the boat doesn't sink cos if it does, we all go down...haha. I don't have spare cash but I dispose my other shares to invest/ gamble in CNP cos my gut feeling tells me when the positive announcement come, CNP should skyrocket and should be able to achieve 50c in my opinion quite easily. Its anyone guess when the announcement will come but I am prepared to wait and hopefully, my patience will pay off. Then in hindsight, I will kick myself for not buying bought more. I think it is a good gamble, buy what you can afford and keep. DOYR


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## gensis1 (24 June 2008)

Interesting article today in the australian about how 'short selling helped bring down centro'..and a 'parliamentary enquiry into short selling'...I wonder if centro's lawyers will use any of this to show how this practice without any disclosure laws guarding short selling, compounded shareholder loses dramatically...


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## uahmad (25 June 2008)

From another forum,

Someone has stumbled across a PDF outlining the sales of some of the Centro properties.

Apparently a search with google resulted in the following PDF

http://centroportfolio.com/Portfolio Overview FINAL.pdf.


Some key notes from the PDF


1)Release of preliminary information: Monday 2 June, 2008 (Access to Financials post receipt of CA)

2)Receipt of first round bids: 12 Noon, Thursday 10 July, 2008

3)Confirmation of shortlist: 12 Noon, Wednesday 16 July, 2008 (Access to data room provided)

4)Close of final bids: 12 Noon, Thursday 14 August,2008

5)Execution of unconditional contracts: By Friday 15 August, 2008


Page 13 also talking about keeping the management rights..



WOW!! this might explain the huge volume the last hour of the day + green.

Cheers


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## DionM (25 June 2008)

Docs now disappeared off the site.  Wonder why.

Appeared legit, the domain is owned by by those linked to it.


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## uahmad (25 June 2008)

I have saved a copy so if anyone wants it just pm me your email.



Cheers


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## $$Punt$$ (25 June 2008)

uahmad said:


> I have saved a copy so if anyone wants it just pm me your email.
> 
> 
> 
> Cheers




Would you be able to paste the article in this forum for every CNP investors to see please? Much appreciated Uahmad


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## uahmad (25 June 2008)

Not an article dude, its a 26 page sale portfolio of Centro assets prepared by Jones Lang Lasalle.

about 2.7mb.

Ill try rapidshare it and post a link.


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## $$Punt$$ (25 June 2008)

uahmad said:


> Not an article dude, its a 26 page sale portfolio of Centro assets prepared by Jones Lang Lasalle.
> 
> about 2.7mb.
> 
> Ill try rapidshare it and post a link.




That's great. I am sure there will be a lot of comments about it from CNP shareholders. Looking forward to see the sale portfolio.


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## uahmad (25 June 2008)

http://rapidshare.com/files/124907491/Portfolio_Overview_FINAL.pdf.html

there you go                                                                     





Uploaded on rapidshare....


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## $$Punt$$ (26 June 2008)

uahmad said:


> http://rapidshare.com/files/124907491/Portfolio_Overview_FINAL.pdf.html
> 
> there you go
> 
> ...




About time CNP shares start climbing....thanks to media announcement but why CNP doesn't announce it? Its ridiculous to invest awaiting news from media instead from the company. No updates from CNP as yet.....haha surprise surprise!


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## gensis1 (26 June 2008)

Yes...lets hope it overcomes any negatives from tomorrows court hearing..don't know if it will though..


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## $$Punt$$ (26 June 2008)

gensis1 said:


> if CNP hits the wall so does CER..don't understand how it can be any different at this stage...
> ...lets not forget the court hearing on the 27 june...this friday..i would sell thurs and buy friday..both CNP and CER will surely dip on friday's media flogging..(this is if no ann. about asset sales is made before then)




Hey gensis1,

Did u sell today? Mayb there will be some positive news from the court hearing 2moro.......fingers crossed. I am not selling mine cos u never know 2moro's market.


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## gensis1 (26 June 2008)

$$Punt$$ said:


> Hey gensis1,
> 
> Did u sell today? Mayb there will be some positive news from the court hearing 2moro.......fingers crossed. I am not selling mine cos u never know 2moro's market.




True...however going on past, and the fact that centro doesn't release any info on hearing, and plaintiffs feed the media with their dribble,I'd say there's a 95% chance media will be negative and sp. dip...
I'm not selling,i've been caught out before on centro run,and paid high price on getting back in...there's still ann. on CAF which is long over due..i decided to ride highs and lows until sept30. Centro should have executed most of its plan by then, to keeps bankers happy til dec 15..


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## vida (26 June 2008)

oops, i missed out again on buying at lowest SP.  Was thinking about it but didn't have time to make decision yesterday whilst too busy at work and today it is up again, but still bargain levels.  I will wait to see what tomorrow brings and maybe buy more then, at the moment just holding what is comfortable and perhaps I have reached my risk tolerance levels on this.


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## mapna (26 June 2008)

I reckon the today news about the assets for sale is not really that simple as there is a condition with the sale that CNP would maintain the mgt right for the assets.  This to me sounds like asking someone to buy the center but not allow to mgt them. Just like asking ppl to put money into the fund for them to manage ???? 

The more I read the article the more I felt like fire-sale b4 30/09 than a normal transaction ....

Anyway, this is my own opinion and I am wrong most of time ...

DYOR ......


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## wilko66 (27 June 2008)

I'm not too fussed about that Mapna....there are plenty of potential buyers that won't have the resources or expertise to manage.  I think its fallacy to assume all buyers even want to manage.

Whether management rights are in or out of the package sold, it'll all be factored into final valuation.  The key issue for us as holders (my opinion) is how the parcels ultimately perform vs current valuations.  

Also, given the time frames it's far from firesale.  Centro could have felt pushed to rush to get an outcome and some positive news out but given May 8 was last extension, mid August is quick but not indicating panic in any way.


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## gensis1 (27 June 2008)

wilko66 said:


> I'm not too fussed about that Mapna....there are plenty of potential buyers that won't have the resources or expertise to manage.  I think its fallacy to assume all buyers even want to manage.
> 
> Whether management rights are in or out of the package sold, it'll all be factored into final valuation.  The key issue for us as holders (my opinion) is how the parcels ultimately perform vs current valuations.
> 
> Also, given the time frames it's far from firesale.  Centro could have felt pushed to rush to get an outcome and some positive news out but given May 8 was last extension, mid August is quick but not indicating panic in any way.




Hi wilko66,
services income is not included in those valuations..(they never are because it is considered a separate business)and they are written down valuations because cap. rates have dropped..so centro are offering mostly 50% of their best yeilding properties at bargain rates(they would have been crazy to give away 100% of all of them)...I think there will be alot of interest for these, especially super funds..I wouldn't be surprised if they had clauses in the contracts to buy the interests back at a future date, once they've restructured..


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## wilko66 (27 June 2008)

Sorry Mapna,  I meant that from a buyers perspective, what they'd be willing to pay for the "package" would already have factored into it the getting or not getting of the rights.  I know the book value of the properties is exclusive of the management business but assuming the market values a property at an amount then it's reasonable to project if management rights were thrown in they'd pay more.

The fact they are both valued and sold exclusive of these rights means to me that the only consideration now is how the sale price fares vs book value.

No?


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## wilko66 (27 June 2008)

gensis1 said:


> Hi wilko66,
> services income is not included in those valuations..(they never are because it is considered a separate business)and they are written down valuations because cap. rates have dropped..so centro are offering mostly 50% of their best yeilding properties at bargain rates(they would have been crazy to give away 100% of all of them)...I think there will be alot of interest for these, especially super funds..I wouldn't be surprised if they had clauses in the contracts to buy the interests back at a future date, once they've restructured..




Gensis, my last post was meant in reply to your post (I addressed to Mapna...sorry)....Also, not sure I read you correctly on the 50% aspect.  In my reading, the 50% relates to the fact that some of the properties on sale are only 50% owned by Centro...not that they're selling 50% of their properties.  My opinion is that the course they're undertaking shows a fairly high degree of controlled disposal considering the backdrop.


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## gensis1 (27 June 2008)

wilko66 said:


> Gensis, my last post was meant in reply to your post (I addressed to Mapna...sorry)....Also, not sure I read you correctly on the 50% aspect.  In my reading, the 50% relates to the fact that some of the properties on sale are only 50% owned by Centro...not that they're selling 50% of their properties.  My opinion is that the course they're undertaking shows a fairly high degree of controlled disposal considering the backdrop.[/QU
> 
> sorry wilko66,I meant CER aren't selling their 50% as well...yes controlled sales..win win for all...


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## $$Punt$$ (30 June 2008)

Wonder why there is no media coverage or reports on CNP recent court litigations? I guess no news is good news. And there seems to be strong market support for CNP SP at around 24 cents. Umm.......wonder any positive announcement soon!


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## vida (30 June 2008)

No media on litigation as its all happening at the lawyers and that is all private and confidential legal work, nothing is due to be dealt with before the court I would think so no public information at this stage. Any leaks from either side can unfarily prejudice their respective cases. Until the next court date, nothing will be due to be announced in relation to the litigation. That is my personal view on it. It will be a long time before a settlement offer of any kind is announced and/or whether and when a trial date is announced and is what will really matter and bring it to a resolution one way or another. In meantime the litigation only works to fuel uncertainty and will continue that way for some time.  So we should forget about that for the moment I think and focus on the company's restructuring efforts and look forward to recovery


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## $$Punt$$ (30 June 2008)

vida said:


> No media on litigation as its all happening at the lawyers and that is all private and confidential legal work, nothing is due to be dealt with before the court I would think so no public information at this stage. Any leaks from either side can unfarily prejudice their respective cases. Until the next court date, nothing will be due to be announced in relation to the litigation. That is my personal view on it. It will be a long time before a settlement offer of any kind is announced and/or whether and when a trial date is announced and is what will really matter and bring it to a resolution one way or another. In meantime the litigation only works to fuel uncertainty and will continue that way for some time.  So we should forget about that for the moment I think and focus on the company's restructuring efforts and look forward to recovery




Good points. But don't understand why CNP doesn't provide market update given there is so much rumours/ interests in the stock. Surely at least a monthly update will restore some confidence and calmness to shareholders. Most announcement if there is drives the SP down or panic selling. Extremely volatile stock thrives on media reports and any good news will spike SP upwards.


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## gensis1 (30 June 2008)

$$Punt$$ said:


> Good points. But don't understand why CNP doesn't provide market update given there is so much rumours/ interests in the stock. Surely at least a monthly update will restore some confidence and calmness to shareholders. Most announcement if there is drives the SP down or panic selling. Extremely volatile stock thrives on media reports and any good news will spike SP upwards.




You only have to look at the may 8 ann. on a 'decision on CAF over next 30 days' comment...this shows that the less info is given to shareholders the better,cause they can look to be misleading...I can only image that the negoiations they are in, are many, and constantly changing,so updates would be the same and probably confusing...


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## wilko66 (30 June 2008)

Shareholder letter just landed...see CNP at 3.45pm;

http://asx.com.au/asx/statistics/todayAnnHeaders.jsp

Not price sensitive, just a rehash of last few months from Centro mgmt perspective.  Nothing new but a reasonable summary.


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## gensis1 (30 June 2008)

wilko66 said:


> Shareholder letter just landed...see CNP at 3.45pm;
> 
> http://asx.com.au/asx/statistics/todayAnnHeaders.jsp
> 
> Not price sensitive, just a rehash of last few months from Centro mgmt perspective.  Nothing new but a reasonable summary.




Did he say they are "selling the CAF" or have they sold the CAF....Not much info on this crucial element..maybe investor relations can give more info???


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## vida (30 June 2008)

The price sensitive info we need to hear is that they have sold assets and paid down debt in significant amount, that will bring up the SP & our mood too


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## ProRip (30 June 2008)

ppl you are very emotional investors (ahhh I suppose that is half the fun jez this is my first stock and I panic less than most the investors on this thread (although I do only have a small punt on CNP), I believe like a few other posts that CNP will not announce anything unless deals are signed sealed and delivered, with the court case\media on their back they can ill afford any sign of mis-leading information or confusion. So it comes down to your own judgement you need to make an assesment of the companies direction in the next 4-5 months and stick with it. So many emotional investors, day traders and now EOFY are making the SP unstable (you need to see through this). I made this my first investment because I believe like many that CNP is undervalued (when I bought at 27c about 3 mths ago) even in the worst case event of a fire sale I believe that at worst I would recieve the money I put in back, or thier abouts. Yet the reward I would gain If I hold for maybe 12mths would maybe be 200-400%. 

Lets try to keep this forum to good assesments\information and not wishful thinking


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## $$Punt$$ (30 June 2008)

I am happy with the market update by CNP today. This is what investors want to know even though there's not much new information....to keep investors know what's going on rather than hearing from media reports. I believe CNP SP will open stronger tomorrow with this update folks. Good luck.:


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## sonicwind (1 July 2008)

An article in the Age today:

*Centro's a goner*
For those bold and foolhardy troopers with the risk appetite to punt on a recovery in the beleaguered Centro Property Group, it may be worthwhile to know that the debt is more of a bargain than the equity.

The convertible notes are bid at 7 cents and offered at 15 cents, which makes them six times cheaper than the shares. Mind you, what this really indicates is that the equity is hardly worth a zac; at least not the 25 cents a share, which it still fetches.

Gallant newspaper reports of a takeover bid poised to swamp the market at $1 a share are perhaps not even fit to wrap the fish in now. But it is the price of the debt which is a worry. Were there any hope of a decent bet on Centro rebounding, the professional investors would be all over these notes. They were trading at 22 cents before the distribution was cancelled. She's a goner.


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## vida (1 July 2008)

If Centro was a goner why would the management be bothering with the huge restructuring efforts which are costing a lot of money, and the refinancing extensions are also costing.  They are making the best commercial decisions for the company and investors and clearly they do not think it is the end of the line, nor do the banks otherwise so many extensions would not have been given and it would already have been 'gone' by now.

See below, CNP owns and manages more than $24 billion of shopping malls around the world - so it can manage to sell a few and pay the debt in time.

*********************************************************

Centro Seeks to Sell A$309 Million of Malls to Pay Down Debt 

By Laura Cochrane

July 1 (Bloomberg) -- Centro Properties Group, which last month won its fifth extension on a deadline to repay as much as A$6.6 billion ($6.3 billion) of debt, is seeking to sell five of its Australian shopping malls to help pay down its obligations. 

All of the assets of the unlisted Centro MCS 9 syndicate are up for sale, Melbourne-based Centro said in a letter sent to investors and e-mailed today to Bloomberg. The unit's malls were worth A$309 million as of Dec. 31, according to Centro's Web site. 

It is an ``optimum time'' to sell the assets, Centro said. ``Certain shopping centers recently offered for sale are achieving strong sale prices irrespective of tight credit conditions and rising interest costs.'' 

Centro Properties, which owns and manages more than A$24 billion of shopping malls in the U.S., Australia and New Zealand, has plunged 96 percent since Dec. 17 when the company said it was struggling to refinance debt as the seizure in global credit markets shut funding avenues. Centro fell 2 percent to 24 Australian cents as of 3:52 p.m. Sydney time on the Australian stock exchange, valuing the company at A$203 million. 

Centro MCS 9 owns Centro Hollywood in South Australia, Hamilton Central in Victoria, Centro Dianella in Western Australia and the Raintrees Shopping Centre and Centro Gympie in Queensland state. The malls have occupancy rates above 95 percent. 

Centro Properties has a stake of about 6.3 percent in the syndicate through its holding in the Centro Direct Property Fund, according to the statement. 

To contact the reporter on this story: Laura Cochrane in Melbourne at lcochrane3bloomberg.net.


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## $$Punt$$ (1 July 2008)

Centro goner? Its typical media of irresponsible and sensationalized reporting. The writer should be sue for damages for making such a bold public statement. CNP should clarify the matter as many like us shareholders get worried by reports like that.


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## vida (1 July 2008)

That "Goner" article is in the frontlines of The Age and am sure it should elicit a response from CNP. Hopefully it doesn't cause a panic selldown tomorrow.


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## 9krpm (2 July 2008)

sonicwind said:


> An article in the Age today:
> 
> *Centro's a goner*
> For those bold and foolhardy troopers with the risk appetite to punt on a recovery in the beleaguered Centro Property Group, it may be worthwhile to know that the debt is more of a bargain than the equity.
> [snip] She's a goner.   :bad:




*That's just an absolute disgrace!* I've complained to the paper/presscouncil/mediawatch (and journo mwest@fairfax.com.au) and urge others to do the same!

:badass:  9k


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## $$Punt$$ (2 July 2008)

SP holding well today despite negative and unsubstantiated reports by crazy journa.......good to get in at this low price I reckon, accumulating another 100,000 shares today.


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## gensis1 (2 July 2008)

Next thur10th or fri11th/july should sum up the real centro situation and put an end to speculation with the first round of bids on CAWF properties due..many bids, sp. should go up...little to no bids, sp. will almost certainly go down, probably alot further than today...(this is if centro release info or if info is leaked).There is of course the other iron in the fire,and thats the CAF,but with no update on the '30day decision' one can only assume that that sale has fallen through...i hope i'm wrong...
today's article does damage centro's position in trying to sell assets at bv. surely they'll do something about this..


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## vida (2 July 2008)

Am glad to hear somone complained about that wildly unsubstantiated piece.  I would if I had the energy, I just think its just totally disreputable and purely personal conjecture that I can't be bothered giving the guy any credence with a response. I think best to ignore him at least for me it feels that way, but if people do want to contact him and his newspaper that is all the better. 

Wow $$Punt$$ I am impressed you bought more today.  If you make a zillion on this stock I would like to catch up with you for a drink , your shout ? or maybe it should be my shout to congratulate you.  Anyway if you do well then so do i but not as well as you. Hopefully you live in Melbourne and we can clink  glasses on it one day .... otherwise commiserations deserve a clink as well


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## vida (4 July 2008)

There is no good press today on CNP or anything.  I have not bought any more and was going to but I think I'd better not, the CNP shares I have already are enough risk. If they do well, then I will be happy enough as it is, if not then I don't want to compound the loss. So I will hold but not buy I think for the time being. My income from now on will be strictly savings and no more investments in market or anywhere else for that matter. It is all too hard at the moment and I just want to get on with life and enjoy not stress.


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## hartley (4 July 2008)

The temptation is there to average down, but I too have decided what i'm prepared to risk and am opting for more secure places to park the rest of my money =P 
One day we'll be kicking ourselves for not putting more into Centro when it was only 22c =P


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## vida (5 July 2008)

Hartley, you are right: there are more secure places to park our money and in in these times we need that. In this market there are lots of alternative opportunities. CNP offers more quick short term reward for the high risk we may presently agree to, while other stocks may be just as rewarding in longer term but at lower risk and that is really preferable I think. As far as I am concerned the bank savings account is suddenly looking very attractive and comfy. I have not been investing new income into the market recently, my savings are growing and I quite like that. Much nicer than seeing the market constantly devaluing my hopeful investments of recent & past years. Oh well I am quite sure there will be a turnaround in 2009 and things will start picking up and in meantime we have a great buying opportunity market if we choose carefully. I am going to take my time and watch and wait.  I may even invest a bit more in CNP yet depending on how their selling of assets goes. Yes 22c does seem like a great SP for buying more and one day we may rue the lost opportunity, but as long as we don't lose what we have invested in CNP and it turns into a profit then we should just be happy ...


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## vida (13 July 2008)

Where is everyone?  Has everyone sold out and given up?  No comments for awhile here, but I guess there is nothing announced no media updates so until then we all just sit and wait..? Is anyone concerned the market is crashing - apparently its a once in a hundred years event what we are now experiencing in the global economy. Is there a recovery looming? Warren Buffet is still buying, says this reversal is the nature of capitalism and the US economy will get back on track eventually and trend upwards again and its the best buying opportunity if one buys value stocks of course. How can CNP cope in this climate of doom even if it is temporary? when will we know..?


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## oldblue (13 July 2008)

I don't have any answers, vida, but if this is a "once in a hundred years event" then it won't be over this year, or probably next!
I'm optimistic that it's a nasty bear market cycle that will play itself out over time as W B suggests.

Disc: Small CNP holding.


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## wilko66 (14 July 2008)

Still here Vida....just holding my breath.  Marketwide issues aside, I expect August to be a month of illumination as sales and their relative success in terms of values start to be announced.  

CFS Retail eyes $300m Galleria in Perth

http://www.theaustralian.news.com.au/story/0,,24013695-643,00.html?from=public_rss


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## shmi (15 July 2008)

looks like a good day today, some sales have been confirmed for their USA properties. i recomend having a look but im not to sure if this will be a daily run or might actually help them get out of trouble, one would have to imagine that it might help get more bank extensions though


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## gensis1 (15 July 2008)

Does anyone know exactly how much debt centro must pay down by dec 15..is it the full amount or half or less to restructure? I don't think they have to pay full amount, cause they don't have that worth of properties on the market at the moment..


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## $$Punt$$ (15 July 2008)

Fuming annoyed with optus network.....Found out the ann at around 12.30pm due to internet accessibility, by then share has dropped 4.5cents off the peak. Make a small profit by selling 200000 at 27 cents but still holding some. What a day!!!

P/S Vida.....I lived in Brisbane and can shout you a drink or two when SP reached 50cents...good luck


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## stock_dexter (15 July 2008)

From SMH.com today...

"it has a 47% stake in the fund that is selling the shopping Centres, Centro America Fund (CAF), and its 50% owned Direct Property Fund International owns another 48%.

Net proceeds will be $340 million after payment of the secured debt, and Centro will receive about $290 million of that, and use it to pay down its own debt.

All up, Centro's banks and US noteholders are owed about $3.6 billion, so there is still a long way to go.

But it's a start."


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## octain (15 July 2008)

I think a sale at 10% below book value is an excellent result for American based centres. The looming recession in the US and subprime has assured their would be few big players willing to fork out 714m in the current climate. 

I would expect to see better results for the Australian assets as our economic climate is in better shape then the US.


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## vida (15 July 2008)

Good to hear you made a profit $punt$, congrats.  I didn't do anything lately with CNP, just holding holding holding my small holding but its lot of $$ to me.

If the assets are being sold just 10% off book value that sounds ok to me, much better than 50% off book value .. gosh !! that's an ok discount in these troubled times I would think. Its not a fire sale. Once the sale is confirmed and contracts drawn and signed then I think the SP may even get to .50c +

Its hard to believe it was up there not too many weeks ago, how things can change so fast .. this really deserves to be a better stock than .27 cents etc.

That's what the banks wanted and this is what they are getting: asset sales! so I think that when we get to December and banks re-evaluate the debt they will more easily extend further if required with improvement in debt levels


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## wilko66 (17 July 2008)

An analysis of the recent sale announcement.

http://www.businessspectator.com.au/bs.nsf/Article/Centro-GLREC


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## tulasi74 (20 July 2008)

Hi everyone

The CAF announcement is an excellent result as its only a 10% discount.  The 10% discount equates to a little over 79 million.  They have retained management rights. From what I have read, CNP will get around $250 million from the 714 million. If they also sell the 1.3 billion portfolio of Aus properties and retain management rights, and CNP gets 650 million to pay off debt, they reduce their total indebtedness by 900 million.  The debt that matured on 15 February 2008 and the relevant interest rates are as follows: (9.1 mln - 6.61%, 61.8 mln - 5.73%, 1340 mln - 8.30%, 1358mln - 5.93%).  It will be better for Centro if they are allowed to pay off debt with higher costs attached to it but that would depend on arrangement with banks.  At an average interest rate of 6.61%, reduction of debt by 900 million will reduce financing cost by 61 million a year.  The February 2008 result excluding writedowns, was a loss of 50 million for 6 months.  This would not have factored in the higher cost of finance on most of the debt which only came into effect in December 2007.  So Centro is a long way away from being a profitable entity even through these asset sales.  If you add to this higher adviser fees, litigation costs, higher costs associated just with on-going negotiations, it will be several years before shareholders can expect anything by way of distributions.  

At last result they had net tangible assets of $1.35 per share.  I read something that said 60% of their assets are in the US and 40% in Australia.  On this basis, the US contribution to net assets is 81 cents and Aus contribution is 54 cents.  Lets assume US assets will see a further reduction in asset values by 20% and Aus by 10%.  This will reduce net tangible assets to $1.13.  The damages claim made by shareholders taking litigation action is 700 million.  This equates to roughly 90 cents per each Centro share outstanding.  Taking 90 cents away from discounted $1.13 gives 23 cents per share which is where the share is trading at the moment.

There are possibilities for spikes in share price to 40 - 70 cent range on asset sales news, or settlement on shareholder claims.  It could be higher if there is talk about takeover. But those who are holding out for a higher price should be prepared to wait 2 - 5 years and that will depend on the future of the credit markets and banks.  I read an earlier post that talked about what is happening as a once in a 100 year event.  If that bears out, I hate to think what the future is for Centro.

I have reduced my expectations significantly and I will be selling some of my holdings at 48 cents as I feel that there are better trading opportunities elsewhere using margin loan. This is just my opinion and please DYOR before making investment decisions for yourself.

Tulasi


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## gensis1 (21 July 2008)

tulasi74 said:


> Hi everyone
> 
> The CAF announcement is an excellent result as its only a 10% discount.  The 10% discount equates to a little over 79 million.  They have retained management rights. From what I have read, CNP will get around $250 million from the 714 million. If they also sell the 1.3 billion portfolio of Aus properties and retain management rights, and CNP gets 650 million to pay off debt, they reduce their total indebtedness by 900 million.  The debt that matured on 15 February 2008 and the relevant interest rates are as follows: (9.1 mln - 6.61%, 61.8 mln - 5.73%, 1340 mln - 8.30%, 1358mln - 5.93%).  It will be better for Centro if they are allowed to pay off debt with higher costs attached to it but that would depend on arrangement with banks.  At an average interest rate of 6.61%, reduction of debt by 900 million will reduce financing cost by 61 million a year.  The February 2008 result excluding writedowns, was a loss of 50 million for 6 months.  This would not have factored in the higher cost of finance on most of the debt which only came into effect in December 2007.  So Centro is a long way away from being a profitable entity even through these asset sales.  If you add to this higher adviser fees, litigation costs, higher costs associated just with on-going negotiations, it will be several years before shareholders can expect anything by way of distributions.
> 
> ...



Tulasi,
I don't believe it's as simple as that...what about fees generated from services business? ...and distributions not paid out in the past and future,where does this go?..and gross rental income % increase?..and alot of others factors?
Anyone can play with mirrors and make any company in this climate look like a basket case...the press are doing a good job of that...


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## stock_dexter (21 July 2008)

Agree with Gensis. Although Centro isn't a "Happy Little Organisation" at present, valuation solely on Net Book Value of Assets and expected outflows misses one key valuation methodology...present value of future cash flows.

That said, I think that resolution of the Court Action and further asset sales will then generate interest in the business to convince the market to start valuing some "going concern" value in Centro.

I disclose holdings in CNP.


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## octain (21 July 2008)

The total Litigation was 700 Mil however even if they(CENTRO) did lose the lititgation it is extremely unlikely they would be required to pay the full amount. I think this could be the major issue with your valuation.I think while I agree its not always good to value A company with the best figures possible its extemely pesimistic to use figures that use a worst case situation. Also once again the value of the service business needs to be factored in. I think 75c of which alot of brokers are quoting isn't far from right.


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## tulasi74 (23 July 2008)

gensis1 said:


> Tulasi,
> I don't believe it's as simple as that...what about fees generated from services business? ...and distributions not paid out in the past and future,where does this go?..and gross rental income % increase?..and alot of others factors?
> Anyone can play with mirrors and make any company in this climate look like a basket case...the press are doing a good job of that...




Fees generated from services business is Centro's main source of revenue.  At last report, excluding asset value writedowns which created a 1 billion loss, Centro made an operating loss of 50 mln in my view.  What I was trying to highlight with my post is that the 50 mln loss was for 1 July 2007 to 31 December 2007.  During this period Centro would not have experienced the higher financing cost they are experiencing now or the adviser plus litigation fees.  By reducing debt, they will reduce interest cost but only by 61 million year.

The only point I was trying to make was that Centro is a long way from making profits because of the high cost of debt. They simply paid too much for their acquisitions.  Whoever advised them on the US acquisitions, assuming they got some advice, gave them poor advice. The Fin Review in one article did report that documents lodged by one of the companies acquired by Centro showed that Centro may have paid up to 60% premium.  With cost of debt rising, it is not hard to see that it would be extremely difficult for Centro to make a profit.

I guess all will be revealed in their August 29th report.  One things for sure, I can see the writing on the wall for its share price for the next 12 months and its not good.  I am sure they will survive and eventually rebuild but its a long term thing.  In the meantime, if the share price spikes which would mainly be through daytraders (of which I am one too), its probably a good time to take profits. Please DYOR.

Good luck all.  I have a lot of shares in Centro.

Tulasi


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## MU002 (24 July 2008)

income source of Centro is very stable, this can be confirmed by the company's statement and bank's extention of debt. I am major in accounting but haven't spent much time on reading the balance sheet yet. from Centro's cashflow statement, I didn't see the loan expense can not be covered. and I read several articles saying Centro can well serve its interests. The assets' book value loss is not a real loss. and one thing very important about Centro is that it holds comercial property, not residential property. shopping centers can hold value much more stable than house. if your home is located in a hot renting area, is the price more unlikely to drop? if Centro's assets can be sold near the book value, the SP will go up, if not, banks won't allow the sale. and more extentions will be given until the property market recovers or someone else want to take over. if Centro have to be wound up, it was long time ago. the pain to me now is that wait another year or two seems very long. so upset to sell all my cnp just one day before its surge last week. I was thinking about buying them back soon after, anyway...


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## $$Punt$$ (25 July 2008)

MU002 said:


> income source of Centro is very stable, this can be confirmed by the company's statement and bank's extention of debt. I am major in accounting but haven't spent much time on reading the balance sheet yet. from Centro's cashflow statement, I didn't see the loan expense can not be covered. and I read several articles saying Centro can well serve its interests. The assets' book value loss is not a real loss. and one thing very important about Centro is that it holds comercial property, not residential property. shopping centers can hold value much more stable than house. if your home is located in a hot renting area, is the price more unlikely to drop? if Centro's assets can be sold near the book value, the SP will go up, if not, banks won't allow the sale. and more extentions will be given until the property market recovers or someone else want to take over. if Centro have to be wound up, it was long time ago. the pain to me now is that wait another year or two seems very long. so upset to sell all my cnp just one day before its surge last week. I was thinking about buying them back soon after, anyway...




That is the dilemma of owning shares, when you had substantial holdings, your judgement become emotional at times and easily influenced by negative news BUT after you sold all your shares and saw SP moving up, you can see there is some light at the end of the tunnel afterall. The question is easier said than done, at what price and how long are you prepare to wait?


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## $$Punt$$ (25 July 2008)

''There has been very strong institutional interest in the portfolio and the options are currently being assessed by Centro,'' Simon Rooney, head of retail investments for Australia at property firm Jones Lang LaSalle, told Reuters.

''A decision is expected next week.''

Good luck guys


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## wilko66 (28 July 2008)

http://business.smh.com.au/business/global-investors-lining-up-for-centros-assets-20080727-3ls3.html


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## vida (28 July 2008)

The news is great today.  the current SP should never been seen again, all up from here I think.  I am already regretting not buying heaps more at .21 and I almost did but then decided I needed to keep my remaining cash without risk. I put it in a six month term deposit last week and now I can't buy more CNP unless I sell other stock or go into debt. My mum was reading the news and gave me a talking to and I for once in my life listened and put my money away somewhere safe and inaccessible.  I should never listen to my mum  Oh well if CNP does well my current holding will please me enough. Will see what today brings, can't wait until 10 am.  The SP should go up but in current climate probably not by anything significant, but its a good omen for the future = all will be well I think with CNP and we can prosper a bit at least if we make good judgments with what we gain


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## wilko66 (4 August 2008)

Small story, small impact but more of the same re pending property sales.  This one from the US

http://www.globest.com/news/1212_1212/newjersey/172785-1.html


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## $$Punt$$ (6 August 2008)

uahmad said:


> From another forum,
> 
> Someone has stumbled across a PDF outlining the sales of some of the Centro properties.
> 
> ...





I believe if there's no announcement about the Australia Portforlio sale this week, it will be next week. Hold on guys!


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## tulasi74 (7 August 2008)

I noticed unusual rise in CER price yesterday but nothing for CNP.  So I bought a few today hoping that the announcement is imminent.  Even if its not this week, then definitely next week as contracts have to be in place by next Friday.

Good luck all.

Tulasi


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## shmi (7 August 2008)

yes this increase in CER and no movement at all in CNP intrests me too, it seems odd to have no movement at all giving CNP being a substantial holder in CER, but it seems that a single seller (info from another forum) seems to be keeping the price at 25c, im quietly confident, but yeh thats just me, jump onto hot copper for a lil more info, CNP gets a bit of chatter there actually

cheers


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## tulasi74 (11 August 2008)

For all you CNP punters out there, CNP is getting ready to move back up closer to the 50 - 63 cent level.

This is partly a gut feeling and partly technical analysis so please DYOR.

Tulasi


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## shmi (11 August 2008)

care to share some of that tecnical analysis at all or detail what type of tech youa re talking about? Furthure more do you believe that this will be a spike or maybe a new resistance level for CNP?


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## nioka (11 August 2008)

tulasi74 said:


> For all you CNP punters out there, CNP is getting ready to move back up closer to the 50 - 63 cent level.
> 
> This is partly a gut feeling and partly technical analysis so please DYOR.
> 
> Tulasi



 I hope you can back that statement up with some technical analysis. to post a 100% rise on a gut feeling must be classed as a ramp.


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## tulasi74 (11 August 2008)

I trade using bollinger bands.  For daily charts I use 20 periods and for weekly charts I use 20 periods and 30 periods.  

I noticed on the daily charts that the bottom bollinger band has been starting to rise and its now at 23.09 and upper band has been coming down and its at 29.71.  On the weekly charts, the upper band price target using 20 periods is 50 cents and using 30 periods is 63-64 cents.  Narrowing bands generally indicate a strong move.  Direction is unknown until the move starts.  With CNP and the news that is expected this Friday, I have assumed that the move is upwards.  Recently on days where share price spiked close to 31 cents, the volume was strong and the weakness that followed was on smaller volume which means those who bought are holding.  

I also use stochastic using 15 periods and that shows that the stock just crossed above the oversold line which is generally a buy signal.

Analysts commentary after the sale of the CAF portfolio was positive especially as CNP had retained management rights for at least 12 months while reducing debt.

There are signs that the credit market conditions are easing.  Recent comments by ANZ when they put down fixed interest rates suggests that cost of debt is the lowest its been for a while.  Other companies that also invest in property like Mirvac have had their share price rise on the likelihood of falling interest rates. There are signs that housing in America has bottomed although it was always the case that shopping centres would not be affected to the same extent as residential property.

I have previously posted some fundamental analysis information.  My basic conclusion was that current share price was discounting for possible fall in property values and shareholder litigation claim.  From memory, the figures were NTA of $1.35 was discounted to 95 cents for potential fall in property values and by another 70 cents for shareholder claims giving current share price of 25 cents.  If you assume that CNP will not need to pay out more than half the shareholder claims, and property prices don't fall by that much and their survival continues, the NTA is around 60 - 70 cent mark.

I do feel though that their August 29th report will be very weak. I expect Centro to have made a loss on an operation level as I expect the refinancing cost, adviser fees would have put them into negative. If this was not the case, they would not have been required on two occasions to raise additional liquidity. How their earnings report affects share prices will depend on what their commentary is about the future, outcome of sale of Aus portfolio which is pending, and share price just prior to the announcement.

This is just my view of the situation.  I have been following Centro for many months but please DYOR.

Tulasi


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## nioka (11 August 2008)

Thanks for the info Tulasi. I agree with most of what you say. I hope enough CNP fans can see things as we do.I'd like to think the shares are worth close to $1 but it is a long way to go to get there. I'll continue to hold.


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## $$Punt$$ (15 August 2008)

Still no announcement even though the execution of contract is today.......  Dissappointed with CNP......if still no announcement next week, I bet SP will start heading south!


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## shmi (15 August 2008)

after watching CNP for a while now, i am not suprosed with this as they dont tend to release info quickly and also its not friday in the US market till our market closes, this might affect it as suposidly much of the interest is from US firms, Also if CNP doesnt release info till End of Aug report i would expect to see leaked documents before then.


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## tulasi74 (17 August 2008)

Looks like I was wrong on my expectations for an announcement.  The AFR reported on Thursday that Centro have had to discard their sale plan for the mini CAWF in the way they had initially planned.  Under initial plan, unconditional contracts were supposed to be in place for the sale of 50% interest on some centres and 100% interest in Centro Bankstown.  They report that the plan was discarded because the bids received were selective and had many conditions attached to them.  Apparently, they are now in talks with one Australian buy for the WA properties.  From memory, I recall reading an article that said that Colonial First State was interested in bidding for one of the WA centres.

I now want to echo the calls made by other posters for some regular updates by management.  It is disappointing not to get an update on August 15 when that date was clearly advised in the media as the date for final contracts to be in place.

Overall, I am losing faith that this company has a strong future.  While they have good assets, it is clear that with what is happening in the US that their assets are depreciating in value but their debts are still very very high.  Cost of debt is also extremely high.  Even if they manage to pull through with the help of bankers, the share price can stay stagnant at these low levels for many months and probably years.  One must question the opportunity cost of holding such a risky investment.

Good luck all.  Hope there is an announcement on Monday.

Tulasi


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## $$Punt$$ (17 August 2008)

*You Got to be Kidding Me*

Losing confidence in CNP, no announcement, no updates, negative news in the media......its like playing russian roulette, seriously considering selling all CNP shares and punt on other stock


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## simontitan (18 August 2008)

This week might prove the make or break it would seem. Been watching since price dived months ago.

Still very tempting though


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## nioka (25 August 2008)

simontitan said:


> This week might prove the make or break it would seem. Been watching since price dived months ago.
> 
> Still very tempting though




 Looks like it is more break than make with today's news that Centro will not raise sufficient funds from sale of properties and are having trouble raising new finance. I'll admit that Centro are proving to be one of my mistakes and I have sold out today as recognition of that. It may be a day trading stock if the situation arises but it is in the past as a long term hold for me.


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## tulasi74 (25 August 2008)

nioka said:


> Looks like it is more break than make with today's news that Centro will not raise sufficient funds from sale of properties and are having trouble raising new finance. I'll admit that Centro are proving to be one of my mistakes and I have sold out today as recognition of that. It may be a day trading stock if the situation arises but it is in the past as a long term hold for me.




Nioka

I am a bit confused by your post.  Are you saying you have sold out or that you are holding it as a long term hold?

I have to agree with you that this is one of my biggest mistake.  A mistake I compounded recently by buying more on expectation of a good announcement on sale of CAWF properties.

While today's announcement was viewed negatively by the market given the high volume and dip in share price, I actually think it was  quite a positive announcement.  For a while now, I have held the view that the only way Centro can get market value for the properties that they are trying to sell is if potential buyers do not offer them prices that are a forced sale price.  If they are meeting interest costs and partially reduce debt while maintaining revenues, their capacity to meet interest payments increases and banks might be more willing than before to refinance the remaining debt for a longer period.  The reason why they have mentioned hybrid securities is because that is the way banks can get exposure to future increase in share price which is bound to happen should a longer extension be granted.  So I am actually viewing the announcement not as an admission that the company is in trouble but more that the company is starting discussions early to ensure their long term survival.

I read on afr.com that JP Morgan are forecasting profit of 158 million for Centro group.  I don't know how to take this as they are one of the banks they would have information at hand on how the Company is progressing in terms of income and cash flow.  If Centro have actually made a profit when they experienced higher cost on their debt, incurred adviser fees and litigation costs, it bodes well for the future.  

I am still holding for 48 cents.  Good luck to all that are still holding.

Tulasi


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## nioka (25 August 2008)

tulasi74 said:


> Nioka
> 
> I am a bit confused by your post.  Are you saying you have sold out or that you are holding it as a long term hold?Tulasi



 I have sold out. I was saying that my original idea was a long term hold but that is now past tense. 
By the mention of hybrid securities I take that to mean something like convertable notes. These tend to have a high interest rate and a very cheap conversion price. The lender can't lose and if the company does OK and the loan is converted to shares it dilutes the shareholding of the earlier holders and prevents good gains. Meanwhile the profits are consumed by the higher interest rates.
I was wrong in buying. I was wrong in holding. Maybe I am wrong is selling today. ???????


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## tulasi74 (25 August 2008)

nioka said:


> I have sold out. I was saying that my original idea was a long term hold but that is now past tense.
> By the mention of hybrid securities I take that to mean something like convertable notes. These tend to have a high interest rate and a very cheap conversion price. The lender can't lose and if the company does OK and the loan is converted to shares it dilutes the shareholding of the earlier holders and prevents good gains. Meanwhile the profits are consumed by the higher interest rates.
> I was wrong in buying. I was wrong in holding. Maybe I am wrong is selling today. ???????




Wow.  Centro today hit its lowest price and you sold out.  I admire your ability to take a loss.  I recently did that with Minara and still regretting it as I went against my instinct.

I think a lot of traders read too much into the dilution and company's disclaimer that it can give no assurance that further extensions will be granted.  Centro said the hybrid securities `may' affect current shareholders and that is true that it will affect equity value for existing shareholders.  But the question is whether it will affect it in such a way to reduce the value beyond where it is now.  I believe not and I am willing to keep holding for a better price that where the stock finished today.  Having said that, it is possible the stock can retreat further to around 13 - 15 cent level and maybe that might be an opportunity for you to make some trading gains.

Good luck if you are still looking at it.

Tulasi


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## vida (25 August 2008)

I bought more CNP today at .195.  I have in the past seen it go down to .21 and not having bought regretted when the SP moved upwards so today I just decided to do it and have averaged down my total holding. I think I am happy with my decision and believe the SP won't go down further as the news today sounded negative thanks to the media it was just a conservative announcement of facts without any hype. The facts are not great but not desperate or dying either but worried depressed types might feel it was doom and gloom and sell out, thus the SP dived a bit as people got scared. Nothing really has changed all that much over the last few months except some sales of shopping centres etc will enable some debt to be repaid which is good. That is all the banks wanted to see I believe, that there was an effort to sell assets to repay debt and that is what is and has occurred. The next extension is not definite but it is being worked on, a much longer extension and as long as the interest payments are being met and the assets are making a good income and show profitability then I think CNP will be saved..


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## vida (26 August 2008)

Stake in Centro may buy time from banks
By Ben Butler

August 26, 2008 07:43am

Shopping centre empire Centro is exploring giving bankers a stake in the company because it cannot find a cash injection. 
Its shares dived 9 per cent yesterday after Centro revealed it had not received any recapitalisation proposals acceptable to its bankers and did not yet have a buyer for its Australian shopping centres. 

Centro will now ask its bankers to extend repayment deadlines into 2009, but faces the prospect of billions of dollars of additional debt falling due if the company's crisis rolls on into a second year. 

The company told the stock exchange it was in discussions with US lenders owed $US1.1 billion ($1.27 billion) by September 30. 

It wants that deadline extended to December 15, the same date a $2.3 billion debt to Australian banks and a $US450 million debt to US noteholders fall due. 

Centro told the stock exchange it was unlikely to find a cash injection before December 15. 

With no realistic prospect of selling the company or going to the market for a capital raising, Centro said it might consider converting some of its debt into "some form of hybrid security''. 

Related Coverage
Reader's Comments: House prices start to tumble
NEWS.com.au, 
Banks drag down market
NEWS.com.au, 15 Jul 2008 
Wall Street leads market higher
NEWS.com.au, 25 Aug 2008 
Centro says asset sales not enough
NEWS.com.au, 25 Aug 2008 
Stocks close lower despite early gains
NEWS.com.au, 7 May 2008 This would give its bankers a stake in the company, but further dilute the already battered equity of Centro's shareholders. 

"Discussions with the lenders on possible terms are at a preliminary stage and no specific proposal has been formulated,'' the company said. 

Options under consideration are believed to include a convertible note, which would pay interest at a lower rate than Centro's bankers now receive but be convertible into company stock. 

Centro chief executive Glenn Rufrano is believed to be looking for a debt deadline extension of longer than six months -- possibly up to a year -- in a bid to ride out the effects of the credit crunch. 

The message of management for the long term continues a theme Mr Rufrano established when he took management of the company from Andrew Scott in January. 

At the time, he said the best option for banks was to stick with current management. 

Mr Rufrano was not available for comment yesterday. 

Centro's bad year started on December 13, when the company went into a trading halt after warning of  "likely increased interest margins on some loan facilities the terms of which are currently under negotiation''.


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## vida (27 August 2008)

has everyone given up on CNP?  It is on the edge that's for sure and on the nose in the portfolio.  What a disaster and nothing less at this stage.  However who is holding still may be in for a great reward or big pain, its one or the other, whichever way the banks roll the dice - they are in charge now and themselves have a lot to lose if they pull out.  If they do leave CNP high and dry they lose all the interest income on the enormous debt, they lose the possibility of repayment in long term and are left with bigger bad debt which they cannot afford to have.  So what choice do they have, their options are tight as well and this gives the shareholders and CNP group a bit of hope.


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## bas (27 August 2008)

I wouldn't touch this stock. If they do some sort of recapitalisation i reckon existing shareholders will end up with less than 5% of the company- making the shares pretty much worthless. Remember what happened with Pasminco?


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## nioka (27 August 2008)

tulasi74 said:


> Wow.  Centro today hit its lowest price and you sold out.  I admire your ability to take a loss.  I recently did that with Minara and still regretting it as I went against my instinct
> Tulasi




You sometimes have to take a loss or face a bigger loss. At least I am a few thousand up on what it would have been today. It may have a little more to fall yet, I may get back in if it gets near 10c. That could be a temporary bottom. but DYOR.


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## tulasi74 (27 August 2008)

I am waiting to see what net tangible assets are as at 30 June 2008.  If Centro were to enter into a hybrid security arrangement with banks, it would be better for existing shareholders if they did not fix a conversion price now.

The banks will be fully aware of what value the properties will get should Centro be put into an administration situation.  

Even though they have a lot of debt, it must be remembered that not all the debt is due and payable now. I think a two year extension with the option of converting debt to shares at a later point makes a lot of sense for the banks.

The decision not to accept private equity was made in conjunction with banks. Why give private equity the opportunity to take up a stake in Centro at dirt cheap prices when the banks can do the same.

I think Centro will be given additional extension through the hybrid security option. CBA and JP Morgan already hold Centro shares and this provides them with a good opportunity to increase their stake at the expense of existing shareholders.

Happy to keep holding.  If I lose it all, so be it.

Tulasi.


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## nioka (27 August 2008)

tulasi74 said:


> I am waiting to see what net tangible assets are as at 30 June 2008.  If Centro were to enter into a hybrid security arrangement with banks, it would be better for existing shareholders if they did not fix a conversion price now.
> 
> The banks will be fully aware of what value the properties will get should Centro be put into an administration situation.  Tulasi.




The asset that Centro has that the banks could destroy if they put Centro into administration is the management rights which Centro seems to be able to retain even if the actual properties are sold. That is the reason that I held centro for so long. Hard to value at this stage. (When I bought in at an average price of around 47c I was expecting a value of around 70c to be reached based to an extent on the value of the income from the management rights.)


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## vida (28 August 2008)

Can anyone tell me the difference between recapitalising and restructuring ?  Why does recapitalising mean our shares will be worthless? I would have thought that would increase their value, at least from current levels.


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## vida (28 August 2008)

since I will be taking a big loss if I sell now, i might as well take the risk (its smaller than it was) and wait to see what happens as if it goes well I will be upset if I have sold out too soon.  If it all folds up then my loss will be just a bit more than it will be if I sell out now. Its not significantly different as my uncrystallised losses now I have adjusted to psychologically and financially so the difference between crystallising existing paper losses and risking what is left, is not that much - so that is my reasoning for staying in until the end or at least until there is some certainty which way it is going to go. I have a vague feeling it will be ok but also know it may very well all crash to zero. I know a 'vague feeling' is not much to go on but I have gone this far so.....

However this will be my last risky investment, from now on only profitable companies and the next several months will show oodles of opportunities for solid investment and low SPs ... and I am ready for it and my aversion to risk is a lot more than it was and I won't be doing this CNP type caper again, that's for sure even if it all pans out well and I make good... whatever ... fingers crossed ...xxxxxxxxxxxx and toes


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## nioka (28 August 2008)

vida said:


> Can anyone tell me the difference between recapitalising and restructuring ?  Why does recapitalising mean our shares will be worthless? I would have thought that would increase their value, at least from current levels.



 Can I suggest that restructuring means selling assets to reduce the debt and recapitalising means raising more share capital to buy out the debt in CNP's case. Issuing more shares does not necessarily reduce the value of existing shares if the additional capital is used to reduce expensive debt or increase assets or income.


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## tulasi74 (28 August 2008)

Massive buying in Centro today between 11.15 and 12.00 midday.  Nearly 9 million shares and share price went up from 15.5 cents to 20.5 cents.  I would hazard a guess that the buying would be a large institution probably with some inside knowledge of tomorrow's results.

I have looked at Centro NP's last filing and according to their financials they have net assets of 2.3 billion.  This is the company which at last filing said their statements were possibly misleading.  Having made those comments I would think that they would make sure their next filing was accurate.

I also looked at the revenue versus expenses.  They made a loss but the loss was because of depreciation, reduction in value of real estate and goodwill reduced to nil.  They still have net assets after all this.  Their cash revenues exceed their expenses for the 3 months by 30 million. The reduction in value of real estate is about 3%.  

At the report CNP filed in Feb 2008, they had net tangible assets of $1.35.  This did not include goodwill.

I think Centro's financials are going to show that they are solvent but are only insolvent if they are forced to sell assets at fire sale prices.  I doubt very much the banks would want the headache of dealing with an administrator that will charge through the nose when Centro are quite adequately meeting interest payments.  If I were the banks, I would take a very long term view and take up the hybrid security offer.  It will be extremely good value from a long term perspective.

I am expecting the share price to rally tomorrow when results are announcement.  It has already started today.

I have been wrong before so please DYOR.

Tulasi


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## vida (28 August 2008)

All the things you outlined in the post just before this one, have been what is relied on throught past year and justified us continuing to hold our investment in CNP and sometimes to top it up when the SP falls too low as it did this week. Yes all those positive elements are still there and have been all along but the huge debt and difficulties with repaying and refinancing it that is the tricky thing but the banks should extend the debt as they did before for the same reasons they did so in the past, those reasons remain and will probably underlie the company's survival into the future and leave some grateful shareholders in its wake. CNP must remain manager of the assets otherwise more value is lost and the banks cannot tolerate that so they will help support the company and see to its survival and will make money doing so - at least that is my viewpoint and of course I don't know everything and I haven't spoken to any banks about it, I just surmise from what we all know


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## nioka (29 August 2008)

I can find nothing new in the report from CNP. There is nothing in it that I can see changing the outlook at all. The fate is still in the hands of the banks and they will be acting in their best interest rather than helping CNP for "old times sake". CNP will probably get more time to restructure but I can not see any way that it will help the SP in the meantime.


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## vida (29 August 2008)

The banks/lenders are likely to support the stabilisation/restructure etc and the announcement from CNP in fact says that that is what they think. Once this is made clear to the market, that there are extensions which go past September and December and are more longterm, the SP will rise I have no doubt about that. The current terribly low SP is a reflection of the uncertainty as to whether the company will survive up to and past Dec 08, once there are announcements saying it is not going to fold the SP will rise.
I think if there was any imminent danger of that the stock would have been suspended as it could not and should not be trading if that was the reality. Regardless of the sensitivity of its position and low SP CNP still trades, is solvent and business is doing very well.  The debt it the issue....


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## Greg71 (29 August 2008)

All I see is a change of polarity. Maybe if it breaks back above resistance and finds support, etc. but otherwise the downward spiral continues. Even today's "bullish" activity wasn't that bullish, as there's rejection of higher prices.


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## MR_B (30 August 2008)

So any expectations from someone good with numbers in the weeks to come? I hold, I would kick myself more for missing out more then for losing what I have in there currently. Come on CNP.


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## nioka (30 August 2008)

MR_B said:


> So any expectations from someone good with numbers in the weeks to come? I hold, I would kick myself more for missing out more then for losing what I have in there currently. Come on CNP.




I can't see any change until there is a breakthrough with either the banks or some new equity funding. The value has been established for the share price through consistant volume trading at current levels. Any new equity funding will be based on this price and probably at a discount. I hope for your sake and for the sake of others that I am wrong but I think the shares could trade as low as 10c to 12c within the next month. DYOR please.


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## tulasi74 (30 August 2008)

nioka said:


> I can't see any change until there is a breakthrough with either the banks or some new equity funding. The value has been established for the share price through consistant volume trading at current levels. Any new equity funding will be based on this price and probably at a discount. I hope for your sake and for the sake of others that I am wrong but I think the shares could trade as low as 10c to 12c within the next month. DYOR please.




I guess anything is possible.  I studied the financials from the last report and at an operating level, things look more promising than I expected.  Taking out all the non cash expenses in their 2.0 billion loss, I actually got a loss of 85 million for the financial year.  This included 70 million of adviser fees.  These adviser fees could potentially be reduced if a longer term extension is given and there is no immediate need to sell assets.

Their net tangible assets per share did reduce from $1.35 per share to $0.69 per share to reflect the loss in the real estate assets.  I guess it wouldn't take much for the $0.69 cents to disappear.  The question for the banks is whether things can get much worse from here.  The $0.69 cents per share is only tangible assets.  Centro's services business also has a value which also got some interest.  The value quoted in media reports was $1.00 billion.  That will add another $1 per share to Centro shares.

It must be remembered that at the group level Centro are about to reduce debt by 2.0 billion which will go partway to reducing finance costs.  They could very well retain management rights.  I doubt very much that the banks will pull the plug from under them as administrators/liquidators are very expensive and they will lose out more if they go down that path instead of giving Centro longer term extension to refinance.

Centro CEO has already said that decision on the debt extension beyond 30 September will be advised in the third or fourth week of September.  I think he is quite confident of getting an extension.

As to share price, I agree that it could stay at levels below 50 cents for another 1 - 2 years even with a longer term extension.  However, I don't think they are going to go under.  So just like the banks, the shareholders also have the choice of holding onto their shares to avoid greater loss than would otherwise be the case.  

30 million shares were traded on 28 August and volume weighted average price was around 18.5 cents.  On Friday after report, it was lower volume but volume weighted average price was above 19 cents which was higher than the previous day.  Even though the stock had a weak close, the overall day was quite strong compared to the previous day.  I am guessing it will trade in the 15.5 cents to 21.5 cents range until the announcement and if the announcement is positive, make a break above 21.5 cents and possibly head to 45 - 70 cents and trade in that range for a while.

I have been wrong before so please do your own reseach.

Tulasi


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## MR_B (31 August 2008)

Holding 100,000 + shares, fingers crossed on the extensions, I guess we should be hearing something before the September 30 deadline? Is the company still meeting current loan repayments? A little nervous, but 20k is recoverable in time with second job...


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## vida (2 September 2008)

Mr B.. you bought 100,000 share at .20 cents ?  Well I think you should do well in the near or far future with this stock although no guarantees naturally, as no one knows for sure not even Glenn Rufrano can be certain.

A lot of people bought shares at a lot higher SP and will be just hoping to get their money back one day soon, happy enough at that I would think and if there is any profit over that possible well that will be even more joyous for some.

Its all relative I think. We hope to make a good profit, but when losses are staring us in the face even if paper only we crave to get our money back and forget the profit, but of course the gain is what we were really after.  Its called gambling and I know that we should not do it if we can't afford it.

Having said that I am also holding/gambling that CNP will manage to hold on to the business and if it can into 2009 then I think it will recover and we will all get our money back and a bit more, although those that bought in say a year ago at peak SP then they will have to depend on the litigation ..

Those of us who bought after the massive market discounting could do very well.. but of course nothing is certain until it is certain - wait and see & pray


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## thedunnyman (8 September 2008)

Is anyone hurting as much as me?

I stupidly bought 3000 of these CNP at $1.22 (really bad choice!) and now i'm down 87%! 

I just want to get back even but it seems as though that will not happen....not until maybe a VERY long time anyway


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## shmi (8 September 2008)

yes its hurting me a lot, admitidly i bought at 26c but i bought a fair few,  iv stopped looking, they will bounce as news of sales comes through. (i hope)


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## vida (9 September 2008)

I've got 25,000 CNP now average .38cents & also not liking to look. I have had a glimpse of a thought of accumulating more but my better sense tells me not to risk it.  We could sell out and get over the loss but then when the announcement comes that they have a long debt extension the SP should move upwards. Its probably traders short selling the stock that is moving it so far downwards at the moment - its perfect for making money on short selling I suppose as there is no good news but nothing too bad either, nothing we don't know. The index derating of the company which was only to be expected probably brought the SP as far down as we see it today, those who can bear to look.


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## oldblue (9 September 2008)

Yes, I've stopped looking too so please don't mention the shareprice!
I give them about a 60% chance of a successful refinancing in the next 3-4 months. Recent developments in credit markets  and interest rate movements probably improve their chances marginally.


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## white_goodman (9 September 2008)

shmi said:


> yes its hurting me a lot, admitidly i bought at 26c but i bought a fair few,  iv stopped looking, they will bounce as news of sales comes through. (i hope)




an article in todays AFR says they are struggling to sell their centres, Centro Bankstown has been pulled off the market through lack of competitive buyers...


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## vida (9 September 2008)

That they pulled bankstown may not be encouraging but its not bad that they refuse to sell at fire sale bargain basement price.  They will hang on to it until better days and its still a valuable asset - there have been a lot of sales and they don't have to sell everything.  The crucial thing is refinancing and if they can swing that for the long term then all is well. The banks asked for asset sales to reduce the debt which would enable further extensions / refinancing so that is what has happened, they are surely making the effort.



white_goodman said:


> an article in todays AFR says they are struggling to sell their centres, Centro Bankstown has been pulled off the market through lack of competitive buyers...


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## nioka (10 September 2008)

nioka said:


> I can't see any change until there is a breakthrough with either the banks or some new equity funding. The value has been established for the share price through consistant volume trading at current levels. Any new equity funding will be based on this price and probably at a discount. I hope for your sake and for the sake of others that I am wrong but I think the shares could trade as low as 10c to 12c within the next month. DYOR please.




 I posted the above on August 30th. Unfortunately for CNP holders I was right. Today sees the shares trading at 11c. Time for me to reinvest the capital held from my sale at 20c. Those that followed my suggestion at 20c will be happier than those that didn't. Will I be happy in a week or two that I chose to reenter now? DYOR


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## blogs (10 September 2008)

Why on earth would you enter CNP now? Might aswell take you money down the casino and pick red or black!!! Far far to much risk!!!


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## hsv2001 (10 September 2008)

it would be a high risk, but you could have the chance to really make some money if the refinancing is successful! at 30 June 2008 the value of assets per share AFTER the huge write downs of centres was 69c per share, this ultimately means that the shares are currently heavily undervalued at 11c p/s and the margin is just that, the huge risk needed to potentially make lots of money.

Thats my opinion anyway.

Marc


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## blogs (10 September 2008)

Forget the 69 cents per share, what value a shoppingcentre if they 'have' to sell it? Something is only worth what someone will pay......


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## nioka (10 September 2008)

blogs said:


> Why on earth would you enter CNP now? Might aswell take you money down the casino and pick red or black!!! Far far to much risk!!!




 Life itself is a risk. I took a calculated risk when I sold and it paid off. I am now taking a calculated risk based on the facts as I see them and reentering. At least I have more shares now than I had last month. I have some faith that the management are trying hard to put value back into the SP. The operating side of the business is performing as I see things. If they can get the financials right then it is on the way back. The fact that the current money situation allowed the interest rate to fall means there is a little more money around and leads me to think that refinancing is possible. Hopefolly I have bought at the bottom and that I will not get cut with the falling knife.


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## nioka (10 September 2008)

blogs said:


> Forget the 69 cents per share, what value a shoppingcentre if they 'have' to sell it? Something is only worth what someone will pay......




Haven't they proved that they don't HAVE to sell?. That is one of the factors that gives me some confidence.


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## vida (10 September 2008)

blogs said:


> Forget the 69 cents per share, what value a shoppingcentre if they 'have' to sell it? Something is only worth what someone will pay......




That is not strictly true.  An asset can be worth a lot more especially in the future than someone is willing to pay during a particular period. The situation here is that everyone, not only CNP, is having difficulty selling assets at an adequate price.  This market condition will improve over time and the purpose of giving further long term debt extension is to provide CNP with time to wait till market conditions improve for further sales. Once these extensions are announced the CNP buyers of this week should be very happy. I think so anyway. We will see.


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## tigerboi (10 September 2008)

*Re: CNP-dead man walking*

I called this  goner elsewhere 9 months ago in between the outrageous ramper(not on asf) who said it was worth $4.60,way way too muh debt should have seen the entire board sacked for gross incompetence.

CNP havent been able to pay $1.1b since december 18th when the drama started,they seek an extension on that til this december 18th...when i believe a further $3.8b is due,they cannot sell assets as any (smart) buyers are waiting for when they fold.

I cannot see how they can climb out of the doo doo,this stock is akin to backing 100/1 shots...they need a miracle which in the current market wont be happening...tb


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## blogs (10 September 2008)

nioka said:


> Haven't they proved that they don't HAVE to sell?. That is one of the factors that gives me some confidence.




Are you all nuts??? The have insane debt levels, are on the verge of going under, have assets that no one wants, its share price is at a all time low and you have confidence? All it takes is for the banks to say no more and she is all over red rover...


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## blogs (10 September 2008)

vida said:


> That is not strictly true.  An asset can be worth a lot more especially in the future than someone is willing to pay during a particular period. The situation here is that everyone, not only CNP, is having difficulty selling assets at an adequate price.  This market condition will improve over time and the purpose of giving further long term debt extension is to provide CNP with time to wait till market conditions improve for further sales. Once these extensions are announced the CNP buyers of this week should be very happy. I think so anyway. We will see.





Sorry Vida but is absolutely true, and the main reason so many people go broke. Try telling the people who have over paid for their houses in the States, the U.K and Europe that they are worth more than what the market values them-a market can OVER value something just as easy as you may think it can undervalue. The simple fact is a asset is only worth its realisable value, at the moment CNP shares are worth 11 cents-you couldnt go to a bank and use them as collateral saying 'but they are really worth 69 cents'.......


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## blogs (10 September 2008)

*Re: CNP-dead man walking*



tigerboi said:


> CNP havent been able to pay $1.1b since december 18th when the drama started,they seek an extension on that til this december 18th...when i believe a further $3.8b is due,they cannot sell assets as any (smart) buyers are waiting for when they fold.
> 
> I cannot see how they can climb out of the doo doo,this stock is akin to backing 100/1 shots...they need a miracle which in the current market wont be happening...tb




Very good points there tiger!! By all accounts we are headed into a great recession, things are going to get worse before they have any chance of getting better!!


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## Lucky_Country (10 September 2008)

The question that really is of the utmost importance is are the banks prepared to right down hundreds of millions if they dont extend ?
That to me is the crunch factor bearing in mind that CNP does meet its interest repayments.


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## blogs (10 September 2008)

You bet they will!!!  Remember a german bank almost ended the extension the last round, property is set to decline, I would not at all be surprised.


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## oldblue (10 September 2008)

Lucky_Country said:


> The question that really is of the utmost importance is are the banks prepared to right down hundreds of millions if they dont extend ?
> That to me is the crunch factor bearing in mind that CNP does meet its interest repayments.




That is exactly the point. Is CNP worth more to the banks alive or dead?
Mind you, it would only take one major lender to decide that the game's over and it is doubtful whether the others would be prepared to increase their exposure to keep CNP afloat.

Yes, I've dropped the odds slightly since yesterday.




Still a 50/50 proposition, IMO.


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## Bushman (10 September 2008)

Buyers wont buy at current book values @ yields of 6.5% -  that is the reality of the current market. 

CNP/syndciates are lame ducks. If you had cash and were looking at say a Bankstown, you would say '8% yield or see you in 6-months when you really are a forced seller'. 8% yield means you will make make an automatic 100bp derived gain on a sub-regional. So you wait for your 10% free kick and look like a hero to your investors.  

Banks will decide if the vulture funds make their killing. Not a good position for equity holders to be in I would have thought.


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## MR_B (10 September 2008)

blogs said:


> Are you all nuts??? The have insane debt levels, are on the verge of going under, have assets that no one wants, its share price is at a all time low and you have confidence? All it takes is for the banks to say no more and she is all over red rover...




I would say I have hope, not confidence. If I had confidence I would buy a lot more of these shares then I already have. With hope, I am keeping what I have. I will try to check the news instead of share price for now. After some significant anouncement, I will check again. As for Red and Black, that only pays double. This could be a lot more rewarding... But people can continue to talk it down on here for now for all I care, its the next major anouncement that I actually care about.


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## nioka (10 September 2008)

*Re: CNP-dead man walking*



blogs said:


> Very good points there tiger!! By all accounts we are headed into a great recession, things are going to get worse before they have any chance of getting better!!




The lemming group believe we are heading into a great depression. I do not believe that at all. However assuming that we are then even cash will be worth nothing. You will need a wheelbarrow of hundred dollar bills to get a loaf of bread if things get that bad. You may as well have shares that are worth nothing as have a lot of money in a bank that goes bust. 

A great depression JUST WILL NOT HAPPEN. China and India may slow down but they will not stop growing. Life will go on. Business will go on.

Our super system produces billions of investment money each year. It has been keeping the market from collapsing and will continue to do so.

CNP is paying it's interest. It has a good income stream. It is a good cash cow for the banks. They are not going to send a good cow to the abattoirs before it stops producing. It is not like a home mortgage where the home owner is out of a job, heavily in debt with car payments, credit cards to the limit and using one card to draw cash to pay the other. That is where the banks call in the debt.

 CNP will survive and pay it's way. That is my humble opinion. DYOR.


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## vida (10 September 2008)

blogs said:


> Sorry Vida but is absolutely true, and the main reason so many people go broke. Try telling the people who have over paid for their houses in the States, the U.K and Europe that they are worth more than what the market values them-a market can OVER value something just as easy as you may think it can undervalue. The simple fact is a asset is only worth its realisable value, at the moment CNP shares are worth 11 cents-you couldnt go to a bank and use them as collateral saying 'but they are really worth 69 cents'.......




You can't use shares as collateral at any time no matter what they are for one thing. A bank does not accept share portfolios as security for anything, ok if its a car, house, fixed term deposits but shares never is my experience. 

People only go broke when they sell an asset during a time when it has devalued and they still owe money on it.  If a person does not need to sell an asset when its current market value has fallen, it can be worth a lot more to them in the future if they hold on to it.  The market rises, falls & rises again.

Its only when value falls are crystallised by selling off and then there is no possiblity of benefitting from the value gain when market rises, that is when people may go broke. Clearly CNP do not have to sell and they are not selling in this market at what is offered because they can afford to wait.  

People are clearly panicking and current values are dropping but if fire sales are avoided and it seems they can be, in anticipation of future improvement in perhaps a year or two then that is all good.  The problem at the moment is the credit squeeze, high interest rates and unpreparadeness of people to enter into as much debt as they were happy to do in prior times.  

THings will improve if we can ride it out and wait without any panic selling as CNP is doing.  Their bankers may pull the plug of course, and they may not if they do not run out of reasons to keep CNP afloat. We will soon know and yes we are gambling on this turning out positively.


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## tigerboi (10 September 2008)

*Re: CNP-banks will pull the plug very soon*



Lucky_Country said:


> The question that really is of the utmost importance is are the banks prepared to right down hundreds of millions if they dont extend ?




There is no ifs or buts about it,within the next 98 days(december 18th) the banks will say thats it,better to get as much now than nothing later.same deal i said about BNB...its the ponzi at work & when the music stops not all get a chair...

cheap easy money for way over inflated assets(sold to CNP by the current ceo,dont forget that!)that now no one themselves want or can afford.

i worked at a company last year(got out 3 weeks before the banks came & locked everyone out,i listened to my gut instinct)that got way over its head in debt chasing its tail,debt to expand like CNP & folded...

apart from the massive debt CNP has you have to look at the entire management of the company which in light of its situation was handled with gross incompetence(gearing after the us asset buy out was 56%,this was a  huge gamble as management predicted with fees it would lower to the mid30's...bad timing,poor judgement).

9 months ago i said they wouldnt survive & i simply cannot see any other way out of it,they cant even pay the interest on the loans...

slow death of a 1000 cuts is whats happening to CNP...

as for a recession?i wouldnt go that far however some discretion is needed which aint a bad thing either as ive started saving additional money i would normally spend...tb


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## MR_B (10 September 2008)

*Re: CNP-banks will pull the plug very soon*



tigerboi said:


> as for a recession?i wouldnt go that far however some discretion is needed which aint a bad thing either as ive started saving additional money i would normally spend...tb




and why are you saving additional money? What's wrong with spending if you have it? If you want something, just buy it now.


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## blogs (10 September 2008)

vida said:


> You can't use shares as collateral at any time no matter what they are for one thing. A bank does not accept share portfolios as security for anything, ok if its a car, house, fixed term deposits but shares never is my experience.




Correct, but there are also many instance where a portfolio can be used for collateral.



vida said:


> People only go broke when they sell an asset during a time when it has devalued and they still owe money on it.  If a person does not need to sell an asset when its current market value has fallen, it can be worth a lot more to them in the future if they hold on to it.  The market rises, falls & rises again.
> 
> Its only when value falls are crystallised by selling off and then there is no possiblity of benefitting from the value gain when market rises, that is when people may go broke. Clearly CNP do not have to sell and they are not selling in this market at what is offered because they can afford to wait.




Sorry but I do not agree. You are 'hoping' it will go up in value, there is absolutely no garauntee it ever will. People go broke by hanging onto a stock 'hoping' it will go up in value. All that is known is what it is worth now. By your reasoning  if CNP went back to $10 it is really ISNT worth $10, becasue 'one day' it could go back down to 10 cents....So how do you value something?



vida said:


> THings will improve if we can ride it out and wait without any panic selling as CNP is doing.  Their bankers may pull the plug of course, and they may not if they do not run out of reasons to keep CNP afloat. We will soon know and yes we are gambling on this turning out positively.




If things were so sure, why wouldnt the directors have been buying up at these gime prices? No change of directors notices? Just be carefull peoples....


----------



## YELNATS (10 September 2008)

*Re: CNP-banks will pull the plug very soon*



nioka said:


> CNP is paying it's interest.






tigerboi said:


> they cant even pay the interest on the loans...




These two statements are in direct contradiction. Confusing and I'm confused. Who's right?


----------



## tigerboi (10 September 2008)

*Re: CNP-banks will pull the plug very soon*



MR_B said:


> and why are you saving additional money? What's wrong with spending if you have it? If you want something, just buy it now.




i usually do that however ive decided to save some more money because unlike CNP i pay cash for everything,that way its mine not the banks...i had a very very sizeable win(if the mrs knew how much i put on the tigers at $4.25 on the weekend she would faint.)..thats 325% profit.

i could of spent it but with plenty invested thats been put away,i do want something but i want 100% ownership so when i get enough saved i will get it.nothing wrong with saving spare cash...tb

cnp now...11c,i predicted sub 10c on monday by friday?


----------



## nomore4s (10 September 2008)

*Re: CNP-banks will pull the plug very soon*



MR_B said:


> and why are you saving additional money? What's wrong with spending if you have it? If you want something, just buy it now.




lol, is it any wonder we have such high debt levels and low savings with an attitude like that.

I don't know why people are even interested in this stock, in this current environment this stock is way to risky for me. One quick look at the chart will tell you something isn't right.

Holding onto this stock puts you in grave danger of losing the lot imo.

Good luck to holders, I hope it all works out.


----------



## MR_B (10 September 2008)

*Re: CNP-banks will pull the plug very soon*



nomore4s said:


> lol, is it any wonder we have such high debt levels and low savings with an attitude like that.




Like I said, if you have money, why not spend it. If your in debt, you don't have money, you owe money. I'm debt free and buy what I want.


----------



## nioka (10 September 2008)

*Re: CNP-banks will pull the plug very soon*



YELNATS said:


> These two statements are in direct contradiction. Confusing and I'm confused. Who's right?




Check the latest reports. It is there in print.They have tennanted property and they have management rights that earn cash daily. They are a sound business apart from the gearing which they are working on.They are well worth 10c+. I can't see them falling any lower but then I am often wrong. However I am happy to hold again for now. Watch this space as they say.


----------



## nioka (10 September 2008)

How has this thread been renamed from "CNP Centro Properties Group" to "CNP banks will pull the plug very soon". Can the mods rename it " CNP banks will NOT pull the plug very soon."


----------



## vida (10 September 2008)

skating101 said:


> Oversold? Its still a solid earning company right? Anyone here buying it today? Im not exactly all that clued up on property trusts




quite a bit of rubbish is being posted here this week   I agree with you that the stock is oversold on the uncertainty factor which is undeniable but!!!
read the latest article below from today's news media: (my only regret is that I didn't wait until now to buy and did not sell at spikes etc.. the usual stuff..)

Centro quietly confident
Cummins 
September 10, 2008 

CENTRO Properties says the decision to withdraw its $600 million Centro Bankstown shopping centre from sale will not affect its recapitalisation program.

The centre is half-owned by the syndicate Centro MCS 28 and Centro Retail Trust. Centro Properties is the manager.

Centro has until September 30 to convince its US lenders to extend their debt deadline to December 15, aligning it with that of the group's Australian lenders.

It is believed the management of the retail landlord is quietly confident it will get its extension. But should any of the banks in the syndicate opt for immediate cash, Centro will go into administration and a fire sale of assets will occur.

Centro chief executive Glenn Rufrano said: "The syndicate business is separate to the Centro headstock. The money raised from any asset sale goes to repay debt (in the syndicate) and then to syndicate investors.

"Centro Properties stands alongside all other investors in this regard. Centro MCS syndicates are separate businesses and are not directly related to the headstock financing or recapitalisation."

He said he was in the middle of a four-week program of meetings with the syndicate and other unlisted investors, and the feedback had been positive.

He also said buyers found it hard to arrange finance for shopping centres valued at more than $600 million in the current climate.

Centro shares closed down 1.5 ¢, or 10%, at 13.5 ¢.


----------



## blogs (10 September 2008)

vida said:


> quite a bit of rubbish is being posted here this week   I agree with you that the stock is oversold on the uncertainty factor which is undeniable but!!!
> read the latest article below from today's news media: (my only regret is that I didn't wait until now to buy and did not sell at spikes etc.. the usual stuff..)
> 
> Centro quietly confident
> Cummins





I always find it intriguing/amusing that any negative comments towards a stock are always dismissed as being rubbish or down ramping, and any positive posts seem to automatically carry some weight of authority.....

Simple fact is have a look at the S.P-people commenting 'rubbish' about CNP could have saved you a LOT of money had people listened. It 'may' survive, but just like the last round-it all hinges on one bank pulling out. To risky for me.....

BTW Caroline Cummins!?!?!?! She would have to be one of the most in accurate and senastionalist reporters out there, she quotes posters from Hotcopper for gawd sakes....At least in this article she is reporting quotes from management lol

And BTW dont get angry at negative points of veiw-nothing we say or do can influence either the S.P or the outcome, its justa point of view, much like yours


----------



## tigerboi (10 September 2008)

*Re: CNP, I couldnt have said it better blogs*

As for rubbish being said have a look at these numbers for rubbish,this company has a massive amount of debt,i am simply astounded at how anyone could possibly find a scintilla of value in this stock.the sp shows the sentiment on CNP...not worth 2 bob & just like bnb i shake my head in total bewilderment why anyone would plough their hard earned into this basket case.but whatever floats your boat i suppose...tb


Maurice Dunlevy | _August 30, 2008_ 

*SHOPPING centre owner and manager Centro has recorded one of the biggest losses in Australian corporate history, taking a massive hit on the value of its Australian and US properties.*
Centro Properties Group yesterday booked a staggering $2.053 billion full-year loss, while satellite Centro Retail Trust was $868 million in the red. 
The losses added to Centro's debt woes, with the group now owing $17.6 billion and relying on the $60 million balance of a $145million liquidity facility to continue operating until the end of September. 
The September 30 deadline is when Australian banks and US private noteholders must be satisfied Centro can trade out of its debt crisis. 
The size of yesterday's losses had not been expected by analysts, who were still digesting Monday's disclosure that Centro Properties Group was unlikely to meet a December deadline to repay almost $4 billion, and would seek long-term debt extensions. 
Centro chief executive Glenn Rufrano described the losses as "piddling" compared with recent corporate losses in the US, but analysts said it was a terrible result that would damage lenders' confidence. 
The $2.9 billion losses were the largest incurred in the 37-year history of Australian listed property trusts, and rank among our largest corporate losses. 
In Centro's home town of Melbourne, losses of a similar magnitude have not been witnessed since the early 1990s, when the Pyramid Building Society crashed with debts of about $2billion, and Victoria's State Bank was forced out of business because of about $2.7 billion of debt run up by its merchant arm, Tricontinental. 
Centro Properties Group's $2.053 billion full-year loss included property revaluations of $1.195 billion, asset impairment of $772 million, unrealised derivative losses of $181 million and $130 million of restructuring costs. 
According to Centro, the Centro Retail Trust's $868 million loss was mainly from non-cash items that included an $883 million write-down of property investments and a $317 million impairment in the trust's investment in Super LLC, the vehicle used early last year to purchase the New York-listed New Plan Excel Realty Trust for $US5 billion. 
The bullish pre-subprime-crisis purchase made Centro the fifth largest shopping centre owner and manager in Australia, but it was the start of a slippery slide that ended in December with Centro unable to refinance $3.9 billion of debt in risk-adverse credit markets. 

Mr Rufrano said yesterday there was no disguising the seriousness of Centro's current situation, but the group's fundamental task remained to secure long-term debt restructuring, with current proposals including a debt for equity swap. 

Analyst reaction to the losses was mostly negative, but Centro specialist Andrew Rosivach, of Credit Suisse, said Centro was doing its best, even though its future remained uncertain in current capital markets. US property valuations remain a concern for analysts, given that 665 of Centro's 794 properties are spread across almost 40 US states. 

Centro Properties Group wiped $1.195 million from US property values, down from $US13.9 billion to $US12.8 billion. 

With Centro doing its own directors' revaluations -- in lieu of independent valuations -- on 70 per cent of the portfolio, actual losses may be much higher. 

In Australia, 50 per cent of Centro's 129 properties had directors' valuations.


----------



## vida (10 September 2008)

Nobody asked what I was referring to as 'rubbish' and I didn't have time to explain.  I am at work and have to be quick.  What i was saying was rubbish was the particular poster who viewed today's values as the only relevant ones, which is absolute nonsense. They are only relevant if you have to cash in today.  We don't go about thinking in terms of today only if we want to live a rational life and meaningful life. Whatever today brings is IT?? Really?..


----------



## blogs (10 September 2008)

Surely you cant be serious? The S.P is at an all time low and you dont think that is relevant?? The S.P TODAY shows what a truely dire postion the company is in.....

Of course the 'future' S.P is important-as investors and traders thats what we work on, but to dismiss a stocks current price due to what it 'could' be in the future is crazy, sorry....


----------



## nioka (10 September 2008)

Tigerboi, 

Nobody disputes your figures, That is why the SP is where it is. However there are around 800 million shares. Each or these has dropped in value by almost $10 each. Therefore the share price drop has more than compensated for any overvaluations and losses. The only question is "will the banks extend the loans". The banks are not secured completely and may have more to lose by not extending the loans. The loans are actually good loans in the sense that they are attracting a higher rate of interest than they would be if the company was able to refinance easily. The interest is being paid I believe. 
 I'm happy to buy at today's price on my assumptions. I calculate a value of 70c share if the company can survive the next 6 months. It may take a year to get there.


----------



## vida (10 September 2008)

blogs said:


> Surely you cant be serious? The S.P is at an all time low and you dont think that is relevant?? The S.P TODAY shows what a truely dire postion the company is in.....
> 
> Of course the 'future' S.P is important-as investors and traders thats what we work on, but to dismiss a stocks current price due to what it 'could' be in the future is crazy, sorry....





You are putting words in my mouth and I can't be bothered explaining anymore.  WHo said anything about dismissing the current SP?  Clearly a lot of people are spooked by it and cannot ignore it to see the potential there.  The question here is will CNP survive and the answer to that does not depend on the current SP.


----------



## tigerboi (10 September 2008)

*Re: CNP,go for your life.very poor odds*



nioka said:


> Tigerboi,
> 
> Nobody disputes your figures, That is why the SP is where it is. However there are around 800 million shares. Each or these has dropped in value by almost $10 each. Therefore the share price drop has more than compensated for any overvaluations and losses. The only question is "will the banks extend the loans". The banks are not secured completely and may have more to lose by not extending the loans. The loans are actually good loans in the sense that they are attracting a higher rate of interest than they would be if the company was able to refinance easily. The interest is being paid I believe.
> I'm happy to buy at today's price on my assumptions. I calculate a value of 70c share if the company can survive the next 6 months. It may take a year to get there.




all i can say is for someone that values a 10c share at 70c IF they survive is knock yourself out go for it,i will say this from myself who in the early 90's was a very big cash punter & a winner(best you follow my race tip thread)is you have got yourself very poor odds...tb


----------



## MU002 (10 September 2008)

*mu002*

I quit holding cnp when I see no dividend payment in near future. but still care the share and people here. those non cnp share buyers pls stop putting negative opinion into this forum unless u can approve it. I doublt we do bunch more research than u guys because we really buy into the shares! if u even dont understand some basic valuation foundamental like yield, how can u say the shopping centers are worthless? the centers can keep their value merely upon rental incomes. this can be decreasing, but cant be eliminated just becaues a tighter credit market or even a recession. banks knew this, thats why centro was provided with heavy unsecured loans. remember what happened when a Germany bank wanted to quit? Jp morgan walk out to settle the extention. why? Jp morgan is still a major shareholder like us and get huge unsecured loans as well. HSBC is another major shareholder by the way, they can only holding their amount of share due to the current bloody low SP. we are protected by the number ZERO. what we can do now is to do some decent research or get professional advice on the process in the case Centro is put into administraion. how much right shareholders retain in the worst case. I think we wont be left nothing based on the tangible assets. and before this can happen, company managers, major shareholders, even banks will do their best to not allow this happen. and in much bigger chance than in the Casino, cnp buyers will get their reward in a year or two. I dont know how low the SP will go further down, I bought 100000 at 14.5 c, I just spent so much time on this share it gave me so much. i will stand with it until the last. and I have some talk with my friend, even the share stop trading in the public market, it can still be trade privately. as far as one day centro come back to profitability. shareholders can still have their value back. again, ask profession opinion on the wind up process. when there is a will, there is a way. Good luck to all my freinds.


----------



## vida (11 September 2008)

*Re: mu002*

The thing is with stocks like CNP it doesn't take much negativity as it stands on the precipice these days, to bring the SP right down to the ground, but on the flip side it only needs one or two positive announcements and/or rumours and the share pricew will rise like a phoenix from the ashes. It is all still possible and the SP would reflect current market sentiment but this is not always based on a rational evaluation of the prospects of the company in question. CNP does have valuable underlying assets which provide regular reliable income on a significant scale. The debt is massive but CNP is not insolvent and can pay the costs of the debt which means continuing income going to its lenders with capital loan to be repaid eventually. The current SP does not reflect the true value of the assets which by a significantly large margin outweigh the total debt. Eventually when the SP stabilises it should  reflect true value but that is not the position at the moment. The whole market lacks stability lately. The best ingredient for success at present time is patience and CNP and its bankers are showing it. It could go either way and this is no doubt a gamble but not like gambling at the casino although at moments it may feel like that.


----------



## blogs (11 September 2008)

Vida, excuse my ignorance, but if CNP is in such a great position, re paying its debts with assets "which by a significantly large margin outweigh the total debt" then what is the problem? What is the risk? Why would the banks call in their loans? In face of this why is the S.P only 11 cents?


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## Greg71 (11 September 2008)

Think of it this way. If you took a position in cnp today, you could put your stop at zero. I guarantee you, the price won't gap through your stop .


----------



## oldblue (11 September 2008)

blogs said:


> Vida, excuse my ignorance, but if CNP is in such a great position, re paying its debts with assets "which by a significantly large margin outweigh the total debt" then what is the problem? What is the risk? Why would the banks call in their loans? In face of this why is the S.P only 11 cents?




The "significantly large margin" depends on the price that the assets can be sold for. Not a high degree of confidence in today's market, hence the risk and the SP. The banks may decide that it is better to salvage what they can rather than risk a further deterioration. A 50/50 proposition IMO but DYOR.


----------



## vida (11 September 2008)

oldblue said:


> The "significantly large margin" depends on the price that the assets can be sold for. Not a high degree of confidence in today's market, hence the risk and the SP. The banks may decide that it is better to salvage what they can rather than risk a further deterioration. A 50/50 proposition IMO but DYOR.




You are right, but that is why they will not sell their assets at today's market prices if they are not good enough considering. They are income producing assets even through a downturn in the economy as supermarkets keep selling food and other basic stuffs through thick and thin. The fact is that they are not insolvent and do not need to be forced into a big sell out at the bottom of the market, even if it bottoms further it is not going to make them insolvent. 

If the banks were going to pull the plug they would have insisted CNP sell the bankstown centre at whatever they could get as if they are put into administration that is what will happen.  So why not let CNP do the fire sale liquidating and insist on it but they did not apparently.  Their bankers etc are supportive according to the latest CNP reports and further extension negotiations are going posivitely.

Yes I agree its a 50/50 situation and high risk etc thus the extremely low SP .. there is uncertainty either way and in this climate people are becoming increasingly more risk averse thus the 11.5 to 12 cents share price today. Sorry to those who didn't want to know


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## nioka (11 September 2008)

oldblue said:


> The banks may decide that it is better to salvage what they can rather than risk a further deterioration. A 50/50 proposition IMO but DYOR.




 The business of the banks is to lend money and make a profit doing just that. The banks are doing very well out of CNP. Because of the situation CNP finds itself with they are probably paying a premium interest rate, probably higher than the banks will get if they were repaid in full and lent it to a less risky borrower. As far as I know CNP is paying it's interest bill.

 If the banks send CNP to the wall they will incur a loss if the property sales are fire sales. Therefore to do that they not only relend the money at a lower rate they will also lose some capital.

Therefore I see it would be bad business for the banks to call in the debt. I know that because years ago I had borrowed in foreign currency and the loan blew out to a point that had the banks called in the loan I could have been bankrupt and the bank would have lost out. They renewed my loan which was by then partly unsecured. I continued in business and repaid the loan after 2 years. They were happy. I was happy. I believe this will happen here. All CNP has to do is keep up the payments and over time reduce the debt. The banks will play hardball to keep on the screws, that is the way they operate. They hate losses too.


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## TheAbyss (11 September 2008)

They cancelled the Bankstown sale because they couldn't garner any interest which may prove to be telling soon.


----------



## vida (11 September 2008)

TheAbyss said:


> They cancelled the Bankstown sale because they couldn't garner any interest which may prove to be telling soon.




Excuse me The Abyss, what are you talking about.  The whole world should know by now the sale is cancelled and the telling thing is already told : we are heading towards a recession.  Haven't you heard yet?  Stay tuned more.


----------



## blogs (11 September 2008)

If we are headed towards a recession would that mean property is to fall, and if so wouldnt the banks then want to get all they could while they can..? What if the same bank thatthrew a spanner in the works of the last negotiations this times decied enough is enough? High risk high return for sure. Good luck to holders...


----------



## nioka (11 September 2008)

blogs said:


> If we are headed towards a recession would that mean property is to fall, and if so wouldnt the banks then want to get all they could while they can..? What if the same bank thatthrew a spanner in the works of the last negotiations this times decied enough is enough? High risk high return for sure. Good luck to holders...




The 64 dollar question. That is what the banks have to work out. But then,

1. Are we headed towards a recession?
2. Are we at the turnaround point of the current mini recession.
3. If we are heading further towards a recession will the CNP centres trade better or worse than other bank customers. Bear in mind that their core customers are the major food retailers. Most centres have fairly long leases.

 Even in a recession it is not all doom and gloom as some posting on ASF would have us believe.


----------



## Greg71 (11 September 2008)

I was thinking of trading it on the short side, but there's just not enough room for it to move before it reaches it's next resistance.


----------



## skc (11 September 2008)

No one knows what will happen to CNP, but we must accept the fact that it can go bust and equity holders get potentially nothing in return. It is most important under these circumstances to manage the risk to your portfolio, even if you have confidence in the stock (for whatever reason). 

Given the high risk of wipe out, I would not risk more than 1-2% of my portfolio in CNP. For those who are thinking of buying 100,000 shares, I hope your portfolio runs into the millions...

Scary to see that many posters are just holding on hope...you should really do your own research, form a view and act accordingly.


----------



## tigerboi (11 September 2008)

*Re: CNP-the slide continues 1/2 cent by 1/2 cent*

I was wrong about this one i miscalculated i reckon by 1 day,tipped it from 16c to sub 10c by what i thought was tomorrow but ended up being today,still 25% was ok.

closed on its low which is an ominous sign as to if it does fall through the 10c support as i expect it to,this could very well not need any stop losses...

if i held this i would have a few changes of reggies ready with a close eye on the dow tonight,as i dont believe the fed bailing out banks & propping up the market is any help to the likes of CNP...dow looks like retesting 11,000 again...tb


----------



## nioka (11 September 2008)

*Re: CNP-the slide continues 1/2 cent by 1/2 cent*



tigerboi said:


> I was wrong about this one i miscalculated i reckon by 1 day,tipped it from 16c to sub 10c by what i thought was tomorrow but ended up being today,still 25% was ok.




 According to me (and Westpac) todays low was 11c and plenty of sales at 12.5c. Gets to be better buying all the time.


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## gensis1 (11 September 2008)

The next 19 days will be played out with rumours and speculation AGAIN, whether it be good or bad,sept 30 will be d-day AGAIN. This next would be the 6th extension the banks would give them...now they've sold some assets,got equity offers,and revenue has actually increased since last qtr...GR is "quietly confident" as he was pre may30th extension AGAIN...does anyone see a pattern here? or is it just me...


(btw..it would be highly be improper for any director to be buying or selling in the company atm..for someone to look at this as an indication for the companies future, clearly doesn't have a clue..)


----------



## vida (11 September 2008)

gensis1 said:


> The next 19 days will be played out with rumours and speculation AGAIN, whether it be good or bad,sept 30 will be d-day AGAIN. This next would be the 6th extension the banks would give them...now they've sold some assets,got equity offers,and revenue has actually increased since last qtr...GR is "quietly confident" as he was pre may30th extension AGAIN...does anyone see a pattern here? or is it just me...
> 
> 
> (btw..it would be highly be improper for any director to be buying or selling in the company atm..for someone to look at this as an indication for the companies future, clearly doesn't have a clue..)




YES that is the situation as it looks to me, we are back where we were a few months ago and it seems like more a sideways move rather than up or down, which is not really good but it is not really bad either 50/50.. and YES exactly what i was thinking about that comment directors were not accumulating -it would be not be appropriate for them to do this and I would think they have enough shares as it is to worry about and enough work protecting their holdings as well as the rest


----------



## vida (12 September 2008)

we are quiet here last few days, like the vanquished are resolutely quiet

it does look grim no doubt about it but the last big SP fall came after the article on the AUS dollar falling increasing borrowing costs but this also means that there is a lot more australian dollars being earned from the US shopping centres as I see it, am I right there?  So it should not be an issue.

I have been thinking a lot about this 'investment' in CNP lately where I valiantly ignored all the analysts' and journalists' negativity and tuned into the positives and the hard work that Rufrano is doing and the potential.

So here I am about to lose an awful lot of money in my terms which I could have/should have invested somewhere with just as much potential that involved far less risk. I am wondering why I make this choice? the crazy in me

Anyway so I am pretty much resigned to accepting whatever the destiny is with my money in CNP, it can still go well and if not, well bye bye money

In meantime I am enjoying my life, I still have a portfolio some of which is coping well with the current market setbacks and I know will see better days even if CNP may not be in the family in those brighter future times

All we can do is wait and see and accept we have taken the risk knowingly and willingly and will we be rewarded or devastasted is the big question and the answer is not too far away, we can count the days

good luck on the big dipper and the ghost train of this stock where we can get out alive, its just all fun and games, don't take it too seriously


----------



## $$Punt$$ (12 September 2008)

vida said:


> we are quiet here last few days, like the vanquished are resolutely quiet
> 
> it does look grim no doubt about it but the last big SP fall came after the article on the AUS dollar falling increasing borrowing costs but this also means that there is a lot more australian dollars being earned from the US shopping centres as I see it, am I right there?  So it should not be an issue.
> 
> ...




Hey Vida,

You followed your guts instinct and this led you to where you are. I was a bit lucky to sell off all my share when the SP was dropping to 23.5c though I still lost couple of thousands. I then entered to buy 200000 at 12 cents but look at the SP today...still dropping. I wonder how long it will go....surely it had to bounce back anytime now or latest 30 Sept dateline. Buy Low sell High. I still had faith that it will rebound and then I will sell. Hopefully it is a big rebound when the announcement is made.


----------



## Garpal Gumnut (12 September 2008)

$$Punt$$ said:


> Hey Vida,
> 
> You followed your guts instinct and this led you to where you are. I was a bit lucky to sell off all my share when the SP was dropping to 23.5c though I still lost couple of thousands. I then entered to buy 200000 at 12 cents but look at the SP today...still dropping. I wonder how long it will go....surely it had to bounce back anytime now or latest 30 Sept dateline. Buy Low sell High. I still had faith that it will rebound and then I will sell. Hopefully it is a big rebound when the announcement is made.




The chart looks crook.

I won't post it.

It may be better to cut your losses rather than holding on for a bounce..

gg


----------



## vida (14 September 2008)

there is only more bad news today on CNP : its quite disgusting as it appears the big asset sale for $780 milliion that I thought was a done deal is not yet so and may fall through.  How terrible! and those other sales which according to what I had read over past months seemed to be done deals, and now they say they may not be so either. What is this rubbish... this changes everything


----------



## shmi (14 September 2008)

where are you getting this 'new' information from?  Is this something new or just the same info restated in a new article

cheers


----------



## vida (14 September 2008)

Centro CEO warns of sale September 13, 2008 

CENTRO'S much vaunted $US714 million ($887 million) US shopping centre fire sale is far from certain, with chief executive Glenn Rufrano warning yesterday that even if the sale went ahead it would be at a lower price.

Mr Rufrano said the contingent sale agreement had left Centro at the mercy of the markets, making it unable to give any assurances that the sale of 29 properties across 15 states would be finalised. 

But the Centro chief said there was more certainty about the buyer wanting to pay less than the $US714 million price agreed in mid-July. 

"We expect the buyer to re-negotiate the price," he said. 

Mr Rufrano said Centro would work hard to maintain the price, but realistically a counter-proposal would come. Centro said in mid-July it had entered into an agreement to sell 29 of 31 properties in the Centro America Fund, a wholesale fund managed by the Centro group. 

The $US714 million contract price represented only a 10 per cent discount to book value. 

The sale could be critical to Centro's attempts to persuade the banks to grant the shopping group its fifth major debt extension. 

Without that extension, Centro has until mid-December to repay almost $4 billion. 

Centro has already admitted it cannot pay and used a financial planners' briefing yesterday for its unlisted direct property funds to repeat the message that debt extensions could provide a lifeline. 

Mr Rufrano said he could not give any assurances about the future, but longer term debt could allow Centro to remain afloat until financial and property markets stabilised. 

Asked if he thought the banks would agree to a debt for equity swap, Mr Rufrano said he did not know, but the current management team was the banks' best hope of getting their money back. 

The briefing was told Centro's Direct Property Fund International and Direct Property Fund would collectively receive $US230 million if the US shopping centres sales -- understood to involve a US pension fund -- went ahead. 

Both funds, which co-invest in other Centro vehicles as part of the group's complicated ownership structure, have had withdrawals suspended since December 17 last year in the wake of the Centro Properties Group collapse. 

Centro said yesterday withdrawals would remain suspended for the foreseeable future. 

Unitholders were also warned of likely losses if Centro re-calculated the funds' investment of about $797 million in the Centro Retail Investment Trust based on the head stock's actual share price, rather than net tangible assets. 

Centro estimates a 24 per cent fall for the Direct Property Fund International, from 79c to 60c, and a 15 per cent drop for the Direct Property Fund, down from $1.27 to $1.08. Centro Properties Group shares closed steady yesterday at .11 cents


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## redandgreen (15 September 2008)

the AUD has fallen 20% since the CAF deal was negotiated...even if they do have to renegotiate at a lower price.....we may not be any worse off.

maybe the US super fund that was purportedly buying CAF is now running the ruler over the whole group given the precipitous SP decline since mid-july and declining value of the AUD

Pure speculation....... but you never know what might lie ahead in these next few weeks????????


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## blogs (15 September 2008)

Gaaawwwd this is looking terrible!! 8 cents....I hope for all the peoples sake here she recovers, I really do...good luck......must be a lot of people hurting


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## nioka (15 September 2008)

redandgreen said:


> the AUD has fallen 20% since the CAF deal was negotiated...even if they do have to renegotiate at a lower price.....we may not be any worse off.




This depends on which currency to loans are using for finance. If the loans are in USD then they are blowing out further, if the interest payments are in USD same problen. However the US income is in USD and that may help. Who knows the way the finances are set up apart from those parties directly involved. The market is making a judgement that may be using the right or the wrong assumptions.


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## vida (15 September 2008)

what was that rubbish that Glenn Rufrano conveyed to the journalist where it was written that centro was "quietly confident".  what did that mean, nothing obviously and why only publish now that the sales are not done deals. I was clearly mistaken as I had held onto the shares all this year believing that the sales had gone through and the lenders would on that basis extend the debt deadlines. The sales were a condition of the extensions and now they are not going to happen as probably the buyers are having trouble with paying for assets where market value is falling. This is not good and I want to get very agrro with CNP for not being clear ages ago that the announced sales agreements were not worth the paper printed on. This is total disaster and I will survive and I am not in debt myself but it looks like this CNP is not going to be supported by the banks under these conditions. I hope I am wrong and if they do extend and they still might, as they stand to lose a hell of a lot more now than even before if they withdraw their support earlierl. If they extend the SP will get back up but that is the question. What will the CNP lenders/backers do now - we need an urgent assessment and a true honest one. Everyone involved is stuck between a rock & a hard place


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## redandgreen (15 September 2008)

Centro is a victim of the sub-prime fiasco not a perpetrator.

All loan repayments are been met. up to date ... a perfect credit history

Loan ratio is still <75%

The fact that the CAF sale has not gone through is not a "show stopper"

It is not the time to be selling  shopping centre...let the market recover.

Contrary to what many might believe, banks are reasonalble.


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## vida (15 September 2008)

redandgreen said:


> Centro is a victim of the sub-prime fiasco not a perpetrator.
> 
> All loan repayments are been met. up to date ... a perfect credit history
> 
> ...




yes I think along those lines too but CNP comments lately are they don't know what will happen, who will do what which is only fair of course.  There were a lot of buyers today at historically low SP. I tend to think positively anyway and am not selling as what will happen if the banks/etc take over CNP.  They will not get anything more for the centres and cannot run them.

Its an uprecedented situation, they say its a once in a hundred years event -and no one really knows what to do.  The shopping centres are making money, they are paying the debt costs but the problem is probably that the banks and lenders are in a tight spot and might need all the money they can get. The banks shares are falling too, as their profitability falls dramatically but even so they can probably afford to extend the debt and not call it in. 

If they call it in, the situation does not improve for anyone, not CNP and not the banks, very little will be gained and only a fraction of the debt will be paid back with buyers paying heavily discounted fire sale prices.  

I think I will just close my eyes and wait it out and not look at my portfolio figures - they are too far from where they were last year. It was looking so incredibly healthy then and I didn't have CNP in it, a mistake I admit now even if they do recover, because I don't like the stress and more risk than I imagined I was getting into. I thought everything would be resolved by now.

Live and learn - from now on I can safely say that I will not be buying into any high risk share ever again.  I have a few biotechs which are not doing well, and a couple that are doing great and will keep those but otherwise just stick to the profitable longterm stable low geared companies.

Did someone say CNP is a victim of the credit crunch? Well maybe so but a willing victim, if they hadn't have got into such massive debt last year they would be ok.


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## vida (15 September 2008)

blogs said:


> Gaaawwwd this is looking terrible!! 8 cents....I hope for all the peoples sake here she recovers, I really do...good luck......must be a lot of people hurting




Blog: are you a CNP holder? What is your circumstance in relation to the company?  On what basis are you making your meaningless waste of time comment   If people don't have anything informative to say then they should not be posting. We don't have time for it.


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## blogs (15 September 2008)

vida said:


> Blog: are you a CNP holder? What is your circumstance in relation to the company?  On what basis are you making your meaningless waste of time comment   If people don't have anything informative to say then they should not be posting. We don't have time for it.




Vida, i understand you must be extremley stressed and upset at the moment so I will let you snide remark pass. And to think I was wishing you luck in my post, would hate to see your reaction if I posted that all holders had been forwarned.....


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## vida (15 September 2008)

that's another unnecessary post.  We have all been aware of the risk and uncertainty.  If you haven't got anything substantial informatively useful to add, stay off. That is the policy of this website. please explain your purpose


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## vida (15 September 2008)

gensis1 said:


> The next 19 days will be played out with rumours and speculation AGAIN, whether it be good or bad,sept 30 will be d-day AGAIN. This next would be the 6th extension the banks would give them...now they've sold some assets,got equity offers,and revenue has actually increased since last qtr...GR is "quietly confident" as he was pre may30th extension AGAIN...does anyone see a pattern here? or is it just me...
> 
> 
> (btw..it would be highly be improper for any director to be buying or selling in the company atm..for someone to look at this as an indication for the companies future, clearly doesn't have a clue..)




GENSIS; your summarisation of the situation was mine too at that point, including the fact that they had sold some assets which was of primary importance I thought.  It was reported in the media that the failure of the sales was not going to be an impediment to debt extension talks. At that stage however I am not sure if all sale failures were evident.  Now its a different story and the banks may not extend this time, but they also might.


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## vida (15 September 2008)

Centro America Fund sale terminatedt Susan Murdoch | September 15, 2008 

SHOPPING mall owner Centro Properties said today a $US714 million sales agreement for its Centro America Fund has been terminated.

But Centro also said it remained in talks with the potential purchaser. 

Centro (ASX: CNP), one of the highest profile Australian victims of the sub-prime crisis, announced on July 15 the proposed sale of 29 of the 31 shopping malls in its wholesale Centro America Fund.

Shares of Centro Properties shares lost 20 per cent to 0.084 cents this afternoon, as the benchmark S&P/ASX 200 index plunged 2.15 per cent.

Centro Retail Trust (ASX: CER) had lost 24 per cent to 0.11 cents.

Centro Properties, which manages almost 800 malls worth $22.6 billion and is the fifth-biggest shopping mall owner in the US, is selling assets to pay down debt.

It has already had several debt extensions from its lenders. Centro's chances of survival will now be under further pressure, with the sale of its America Fund looking less likely.

Richard Morris, analyst at Constellation Capital Management in Sydney, which holds shares in Australian property trusts, said: “They've got to be getting closer to oblivion, but the question is, do the lenders want to liquidate all these property assets in the current environment or would they prefer to leave them in the hands of Centro a bit longer in the hope the markets turnaround and there can be a more orderly sell down?

“Signing the death warrant for the company may not be the best outcome, that's what the banks would be thinking I'd assume.”

Centro said the due diligence period had expired and the purchaser had elected to terminate the agreement. 

“Notwithstanding termination of the agreement, discussions between Centro and the purchaser are continuing,” Centro said.


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## blogs (15 September 2008)

lol explain my purpose? Oh I forgot, my pupose BY WISHING THE HOLDERS LUCK AND SHOWING A BIT OF EMPATHY must have been to somehow send the S.P lower...

Look Vida, its not my fault CNP is now below 8 cents, and its not my fault if you have done a heap of money on it. I made a post actually wishing you holders some luck ,get a life and stop taking you anger and frustration out on me.


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## Sunder (15 September 2008)

From what I've read, it really does seem to be the model and the market not matching, (High debt in credit crunch time) nothing fundamentally wrong with the business.

Am I missing something?

Is it worth knife catching this one?


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## nioka (15 September 2008)

Sunder said:


> Is it worth knife catching this one?




That is not a question to ask on ASF. It is one you can only ask yourself. Some of the information available here will give an answer one way and other information will go the other way. Regardless of all that someone should only act after deciding how much risk they can afford to take.


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## Sunder (15 September 2008)

nioka said:


> That is not a question to ask on ASF. It is one you can only ask yourself. Some of the information available here will give an answer one way and other information will go the other way. Regardless of all that someone should only act after deciding how much risk they can afford to take.




Yeah sorry, bit of a rhetorical question. Wasn't meant to be applied to my personal situation. 

Meant to provoke some comment on whether people thought the right model in the wrong market was a death sentence or just a temporary set back.


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## vida (15 September 2008)

Sunder said:


> From what I've read, it really does seem to be the model and the market not matching, (High debt in credit crunch time) nothing fundamentally wrong with the business.
> 
> Am I missing something?
> 
> Is it worth knife catching this one?




Hi Sunder;  its not just the timing, its the inability to pay debt when it falls due now and the banks are relied on to extend.  Yes I think this will happen as in this market the banks have even more to lose if they don't agree. Its not a matter of cutting losses, its a matter of adding to the bank's massive losses which can be avoided if they extend and wait till market improves.

It has to improve eventually as the world economy will not sink to oblivion   at this low SP it may be worth risking a falling knife catch, but I wouldn't be buying too many.  If the banks extend and it very likely they will it there should be a big spike in the SP .. and the extention will have to be a lot longer than December to be feasible and workable

I am not happy but I have decided not to sell at this low SP as the value left is not that much and since there is a chance it could turn out ok... it doesn't need a really big spike for me to break even as I bought in relatively low


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## vida (15 September 2008)

I agree with Sunder that asking ASF members whether its worth the risk is something for you to decide. Only you know what you can afford to lose.  This stock at this stage is a very high risk gamble. It may be rewarding and it may turn to dust before our eyes and very soon too.  

If anyone here knew how things would turn out and whether it was a buy we would all be buying and becoming very wealthy soon, but unfortunately it is not the case.  We have no idea and only go by what we read in the media.


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## Sunder (15 September 2008)

vida said:


> Hi Sunder;  its not just the timing, its the inability to pay debt when it falls due now and the banks are relied on to extend.




Let me just clarify this - My understanding was that they can service the debt, but can't renew the loan or repay it in whole.

If the value of their assets exceeds the amount owing, I can't see this as being a death knell. Of course banks would do as much as possible to extend the deadlines, otherwise they'd have a whole lot of assets which don't belong to their core business. 

Of course, if they ever reached a situation where they could not service the debt, then the company is worthless.


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## nomore4s (15 September 2008)

Sunder said:


> From what I've read, it really does seem to be the model and the market not matching, (High debt in credit crunch time) nothing fundamentally wrong with the business.
> 
> Am I missing something?
> 
> Is it worth knife catching this one?




lol, high debt in credit crunch time and nothing fundamentally wrong with the business?

Just have a look at the chaos being caused by companies in the US with high debt and overpriced assets atm.

This company is up to its eyeballs in debt and a lot of uncertainity about the sale & value of its assets and you think there is nothing wrong with the fundementals?
Have alook at the chart - what does that tell you? Set any warning bells off?

Why anyone would even comtemplate buying this now is beyond me, it's now below 7.5c, why not wait till it at least starts going back up before buying in. Even if you buy at 11-15c once all the problems are sorted out you will still be able to make good money.


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## tigerboi (15 September 2008)

*Re: CNP-sub 10c as predicted*

ive been saying for months cnp & bnb are just giant ponzis for suckers,they own NOTHING cnp have humungous debts of about $17b...

it justs bewilders me how anyone could put their hard earned coin into this & not only that but continue to deny its a goner!talk about rome burning...stay away from this...tb


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## MR_B (15 September 2008)

*Re: CNP-sub 10c as predicted*



tigerboi said:


> ive been saying for months cnp & bnb are just giant ponzis for suckers,they own NOTHING cnp have humungous debts of about $17b...
> 
> it justs bewilders me how anyone could put their hard earned coin into this & not only that but continue to deny its a goner!talk about rome burning...stay away from this...tb




tb, I bet you also have posts on other threads to say when you have been wrong also, probably something like "I said this would fail but I was wrong" ? Or you don't make any wrong decisions? Anyways, I'm pretty sure people don't need to see your 'told you so' garbage. The people buying these shares, as myself, obviously would know it is a risk. We KNOW it could all be gone, your 'I told you so's' are just going to be anoying for no reason. Its the same as saying 'told you so' to someone that loses money on the pokies, you know people that win, but the odds are against it.


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## Sunder (15 September 2008)

nomore4s said:


> lol, high debt in credit crunch time and nothing fundamentally wrong with the business?
> 
> Just have a look at the chaos being caused by companies in the US with high debt and overpriced assets atm.




If that was the case, negative gearing would never succeed  Oh wait, that's all coming unravelling in every western world too, isn't it?

If the yield the company can get is greater than the interest rates their creditors are asking, the problem is not with their business model. The problem is with their creditors asking for debt which is being serviced, to be recalled. 

The question is, is this the case? Are CNP borrowing at 8% or whatever it happens to be, and returning 10% on their investment? Or are they getting 6%? My understanding was that cashflow wasn't a problem. The problem is the banks want their money back, despite the fact that the debt is being serviced.


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## freddy2 (15 September 2008)

Sunder said:


> If that was the case, negative gearing would never succeed  Oh wait, that's all coming unravelling in every western world too, isn't it?
> 
> If the yield the company can get is greater than the interest rates their creditors are asking, the problem is not with their business model. The problem is with their creditors asking for debt which is being serviced, to be recalled.
> 
> The question is, is this the case? Are CNP borrowing at 8% or whatever it happens to be, and returning 10% on their investment? Or are they getting 6%? My understanding was that cashflow wasn't a problem. The problem is the banks want their money back, despite the fact that the debt is being serviced.




With this logic banks should offer any profitable company infinite leverage, there would be no need for equity only debt. The fact that business earnings fluctuate means your logic is wrong. CNP's business model was completely flawed, in that they borrowed way too much money.


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## nomore4s (15 September 2008)

Sunder said:


> If that was the case, negative gearing would never succeed  Oh wait, that's all coming unravelling in every western world too, isn't it?
> 
> If the yield the company can get is greater than the interest rates their creditors are asking, the problem is not with their business model. The problem is with their creditors asking for debt which is being serviced, to be recalled.
> 
> The question is, is this the case? Are CNP borrowing at 8% or whatever it happens to be, and returning 10% on their investment? Or are they getting 6%? My understanding was that cashflow wasn't a problem. The problem is the banks want their money back, despite the fact that the debt is being serviced.




The question would then be why do the banks want the money back?
The big problem is the equity in the assets has dissappeared and this is making the banks very nervous in the current markets.
Also debt is now more expensive and that is catching up with companies like this.

I don't trade on F/A but even I can see that the business model was flawed, when you load up on excessive debt on overvalued assets it is only a matter of time before it all blows up in your face.

I'm not really sure you can compare negative gearing to the way these types of companies operate.

Alot of companies paying the price for greed and fancy finacial engineering imo


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## redandgreen (15 September 2008)

'The big problem is the equity in the assets has dissappeared and this is making the banks very nervous in the current markets.'

how do you come to this conclusion?

Look through gearing of 73.9% ( though high,  should still  be manageable).

NTA 69c


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## nomore4s (16 September 2008)

redandgreen said:


> 'The big problem is the equity in the assets has dissappeared and this is making the banks very nervous in the current markets.'
> 
> how do you come to this conclusion?
> 
> ...




Again Fundies aren't my strong point.

The point I'm making is these assets aren't worth what they were when purchased, and I believe they are having trouble selling these assets now, which further devalues them, which in turn makes the banks nervous.

This company may or may not trade through its current problems but having huge levels of debt in this current market is not a good thing imo.


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## vida (16 September 2008)

nomore4s said:


> Again Fundies aren't my strong point.
> 
> The point I'm making is these assets aren't worth what they were when purchased, and I believe they are having trouble selling these assets now, which further devalues them, which in turn makes the banks nervous.
> 
> This company may or may not trade through its current problems but having huge levels of debt in this current market is not a good thing imo.




Hi No More 4s.. that's right the assets are not valued at the same level today as they were when purchased, but that can be said for a lot of asset classes at the moment.  This is only a problem if CNP are forced to sell their quite substantial assets at very low prices which they are trying to avoid.  

Eventually the markets will stabilise, asset values and credit markets will recover so if the banks are willing to wait they can get all their money back.  It only makes sense that they should want to wait rather than liquidate the assets now and suffer a massive loss.  In meantime they are earning interest.

This scenario seems to be the general opinion/outlook but who knows what will happen?  The banks may just give up and decide to write it all off but why would they do that? It doesn't make sense as if they were going to do that they would have gone down that road ages ago. It all sucks really and I wish I had sold my holding when I was in profit, but greed made me hold on.

I can manage the loss and to write off, but I am not happy about it.


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## vida (16 September 2008)

redandgreen said:


> 'The big problem is the equity in the assets has dissappeared and this is making the banks very nervous in the current markets.'
> 
> how do you come to this conclusion?
> 
> ...




the equity in the assets has not disappeared. I wish that people who  who have nothing to offer the thread and intrude with half baked comments & who don't have any involvement in the shares would just stay out of it here


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## vida (16 September 2008)

I am not sure of course, as no one can be, but the fact CNP management and its lenders did not agree to sell the assets at a lower price than negotiated in July, is a good sign.  If they thought the company would fold up with the sale falling through they would have agreed to lower the price. It may not be correct perception but it seems to me that CNP are able to hold out and pull the sales because its bankers supported that decision. That should be an encouraging sign I would think although the media haven't taken that viewpoint at all but prefer to see it means CNP going down and dying


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## vida (16 September 2008)

At least one article sees the silver lining!!  A little better insight here.

*******************************************************

Centro shares fall as US sale terminated  Maurice Dunley | September 16, 2008 

CENTRO'S $US714 million ($880 million) US shopping centre sale has fallen over in a setback described by analysts as pushing the group even closer to administration.

In one of its darkest days since the troubled shopping centre owner and manager revealed a $3.9 billion funding shortfall in December, Centro's battered shares fell to record lows yesterday as investors baled out. 

Centro's head stock dropped 31.4 per cent to 7.2c, while its retail trust fared little better, with a 31 per cent fall. 

The timing could not have been worse for Centro, which by the end of this month must satisfy Australian lenders and US noteholders that it can implement a rescue plan before another December 15 deadline, when it is due to repay $450 million. 

Centro chief executive Glenn Rufrano put his best foot forward yesterday with new plans to break up the 29-property Centro America Fund portfolio and re-offer it for sale in two or three lots. 

But there was no hiding Mr Rufrano's bitter disappointment that the sale to an undisclosed US pension fund -- brokered through an adviser -- did not go ahead. 

He had, however, flagged that possibility on Friday, only hours before negotiations on a highly conditional purchase contract signed in July abruptly ended. 

The silver lining for Centro, however, has been the backing it received from the banks to reject Friday's bargain basement purchase offer, which was reportedly well below the original $US714 million contract price. 

That bodes well for Centro's chances of clearing the September 30 hurdle, although Mr Rufrano said he did not think the failed US sale would have any effect on that deadline. 

In its statement to the Australian Securities Exchange, Centro said discussions with the previously contracted buyer continued. 

But Centro is determined to maintain the upper hand and, with the support of its lenders, will be able to approach other buyers in a sale process that should take two to three months to finalise. 

The previous price of $US774 million represented only a 10 per cent discount to book values, but with US financial and property markets going from bad to worse, the sale price will be lower. 

Centro would not reveal the final pension fund offer but, according to analysts, the discount could have been 20 per cent or more. 

Centro has been under similar pressure to drop the asking prices of its Australian shopping centres, but has so far held the line. The group has reportedly encountered problems finding buyers for big-ticket items, among them the $600 million Centro Bankstown centre, which was recently withdrawn from official sale. 

However, a round of sales of properties under $75 million is likely in weeks. The Southport Centre on the Gold Coast is expected to be among the first of these properties. 

Centro Properties Group closed at 7.2c, down 3.3c, while Centro Retail Group closed at 10c, down 4.5c.


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## tigerboi (16 September 2008)

*Re: CNP-low of 5c today*

lets see who can pick its low of lows today...5c for me...get out while the going is only terrible...tb


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## Sunder (16 September 2008)

vida said:


> the equity in the assets has not disappeared. I wish that people who  who have nothing to offer the thread and intrude with half baked comments & who don't have any involvement in the shares would just stay out of it here




This is what I'm arguing - although I'm not sure I'd be quite so antagonistic.

I'm still shopping at Centro Bankstown. I drive past Centro Roselands on the way to work. Heck, on my way to Newport the other day, I saw a sign to Centro Warriewood. The physical assets are still there, and the shops are still full of people paying rent. That part of the model is good, they have their shops, and they are full. 

The question is - how much STOCKHOLDER equity is still there? Say for every $1 raised using shares, they borrowed $9. Let's make it a theoretical $100m and $900m for $1b (Totally theoretical)

If they bought $1b worth of shopping centres, and the price of the physical real estate fell to $800m, then stockholder equity is wiped out, and they are in negative equity - hence why banks might want the money back, and shares go to a few cents each. 

But if the rent is enough to service the debt, and investors believe that in a few years, the real estate would go to 2 Billion, the company does not need to be wound up - in fact, with a long term view, it would be massively under priced. 

Once again, let me clarify. I am not offering or seeking advice. I am provoking debate and asking for people to poke holes in my "ifs and buts".


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## tigerboi (16 September 2008)

*Re: CNP-TOTAL $17B WORTH OF DEBT*

What dont people understand about CNP?it has a total of $17b worth of debt...what are their assets REALLY worth?remember this.their valuations were done by cnp managers...

i believe their value when they bought the us fund was $25b,that would be worth?less than 1/2 at least...lets say $10b of assets at current prices...guess what trendsetters they still owe $17b worth of kanga/coin...
9 months ago i said this was a dead duck...tb

cnp got caught in the pyramid of pain(suckers) its that simple...rufrano sold them a dud(he got paid)...


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## $$Punt$$ (16 September 2008)

I am a short term trader. My view is that it will secure an extension to December 2008 as it is only for another 3 months extension. I think the banks will allow that to happen and decide the main task of whether to renew further extension come December. My strategy is to sell when the announcement is made. DYOR. For long term investors, you guess is as good as mine with very high risk, very high return. Good luck guys.


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## tigerboi (16 September 2008)

*Re: CNP-next trading halt could be its last*

Short term trading being the key word there for sure,i dont think the banks will extend beyond the last deadline,i reckon they are toast & the next trading halt will be its last as futher bank losses will happen...tb


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## Glen48 (16 September 2008)

MY guess is as the retail sections slows down due to the recession USA and here  centre owners will be bailing out and rents will fall back thereby giving Centro less income???


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## tch (16 September 2008)

Hmm,seems to be a lot of people buying up today. Dropped a bit initally and now it's up on y'day's price. Changed by apx 36% up to 9.8c. Hope we've seen the worst of it in recent days!


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## vida (16 September 2008)

Sunder said:


> This is what I'm arguing - although I'm not sure I'd be quite so antagonistic.
> 
> I'm still shopping at Centro Bankstown. I drive past Centro Roselands on the way to work. Heck, on my way to Newport the other day, I saw a sign to Centro Warriewood. The physical assets are still there, and the shops are still full of people paying rent. That part of the model is good, they have their shops, and they are full.
> 
> ...




Sunder:  yes it doesn't look too bad when you put it like that.  There is a lot of debt but it isn't all due now, 76% leverage altogether so they are solvent and income earning and paying the debt costs. In the future the market will improve and the banks will get their money back plus all the interest earned in the meantime. The issue is whether the banks can afford to wait, their balance sheet is deteriorating but then again to add more losses to it via CNP is not going to help the banks either at the moment.  Their position is risky2.

I personally think that there is a good case for the lenders to keep CNP going for a lot longer


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## blogs (16 September 2008)

Vida, you must be happy with todays movement-well done. Not sure why you took aim at me-maybe just the stress of the day... Anyway heres to playing the ball and not the man and hoping to see CNP on the up, on such a terrible day its nice to see some green.....


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## hsv2001 (17 September 2008)

hey here is a report i though was interesting, seems a report had hinted by the banks to centro to reject the offer of the US sale as it was too much under the asking price for the centres. Perhaps this means that the possible extension may have already been hinted ?????

Source - http://www.businessspectator.com.au...efy-gloomy-market-JJ87B?OpenDocument&src=srch

"Centro shares surge 33% defying market gloom

By a staff reporter

Centro Properties Group Ltd shares have bucked the trend on a gloomy market, jumping as high as 33.33 per cent, a day after the troubled property investor said a planned $US714 million ($A880 million) sale of some of its US shopping centres had fallen through.

Centro shares were trading at 9.3 cents, up 29.16 per cent, at 1524 AEST, having reached a high of 9.5 cents.

The surge reversed the record 31.4 per cent slump experienced by the company on Monday, when its shares fell as low as 7.2 cents.

Centro said on Monday it had failed to close a deal to sell 29 US malls, a fortnight ahead of a critical deadline with its lenders for the refinancing of the company's debt.

But the company said talks with the purchaser were continuing, although there was no assurance the discussions would lead to a further agreement on a sale.

Separately, a report in The Australian said Centro had received support from banks to reject the offer, well below the original asking price.

According to the report, this may be a positive signal for Centro as it struggles to meet a critical September 30 bank refinancing deadline.

The company has already received several repayment extensions from its lenders.

Centro shares closed up 22.22 per cent to 8.8 cents."

Marc


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## vida (17 September 2008)

HSV 2001: that article is days old now and it was already posted on this thread days ago when it was first released to the press.  Yeah its common knowledge I think now that the banks support CNP decision not to sell.


----------



## vida (18 September 2008)

Analysts expect Centro extension

As vital to the system as AIG.

Natalie Craig and Eli Greenblat 
September 18, 2008 

SHOPPING centre owner Centro, like the government bailed out American insurance giant AIG, is almost too big to be allowed to fail, despite its ongoing inability to pay down maturing debt.

Analysts say that the collapse of a crucial deal to sell American shopping centre assets is unlikely to extinguish its chances of an extension on $1.2 billion in loans to US noteholders maturing on September 30.

They say the last thing Centro's financiers want is to become owners of shopping centres via a complicated web of syndicates and funds. Especially when those shopping centres, both here and in the US, are proving hard to sell.

Talk among the insolvency industry is that tens of millions of dollars in fees would be ripped out of a Centro collapse, making its decaying corpse the biggest game in town for corporate undertakers.

Only the biggest insolvency firms in Australia would have the resources and skill to handle a Centro administration. The administrator would be appointed by Centro directors with advice from their lawyers as well as input from leading creditors.

Centro continues to bleed cash and test the patience of its backers. Centro reported negative cash flow of $148.3 million for six months to June 30; with restructuring costs of about $60 million; interest losses of $92.9 million and derivatives losses of $84.2 million.

Winston Sammut, investment director of Maxim Asset Management, said banks and financiers were "probably leaning towards an extension".

"What Centro has basically got going for it is time ”” I think if they can get an extension they will survive," Mr Sammut said. "If Centro goes into administration, its lenders will be in the same position that Centro is at the moment ”” with assets to sell but no buyers, or buyers at very low prices."

Centro would also owe Australian lenders and US private placement noteholders about $2.75 billion by December 15. But Australian and US noteholders must be satisfied by September 30 that Centro is successful implementing the plan it outlined in February.

Mr Sammut said Centro had failed to reassure its lenders.

"The issue for Centro is that they should be showing their lenders that they're making progress in terms of selling down some assets. Unfortunately that hasn't been the case."

It was revealed on Monday that a deal to sell Centro's stake in its American shopping centres had fallen through.

The sale of Centro's interest in the Centro America Fund was a key to its strategic plan.

It has also had limited success selling shopping centres in its Centro Australia Wholesale Fund, which has stakes in 25 Australian shopping centres.

The only possible success is the conditional sale of an Adelaide car park, on behalf of one of its syndicates, for $47.7 million.

It told investors last week it had been unable to find a buyer for the $300 million Centro Bankstown shopping centre in western Sydney. The sale of Centro Southport in Queensland for an estimated $75 million has also fallen through.

A spokesman for Centro said these were "significant one-offs" that were pulling down cash flows and that "but for those one-offs we are more than covering the interest".

Mark Wist, director of property ratings agency PIR, said there was "considerable nervousness" surrounding Centro's ability to sell its assets following the collapse of the CAF deal.

He said if Centro collapsed the reputation of Australian REITs overseas could be "impaired".

http://www.centro.com.au


----------



## hsv2001 (18 September 2008)

That report hasn't seemed to have much affect on the sp. but AIG fell $1.70 yesterday after being saved by the government, I honestly thought that the share price would stay steady or begin to rise. However in saying that the US market took a huge fall yesterday but to drop from $3.75  to $2.05 is crazy. If this happened to Centro would centro then fall further down?


----------



## foxyshres (19 September 2008)

First round of sales in & not an enormous discount on book value. LONG overdue! Heres hoping theres a swing upward


----------



## $$Punt$$ (19 September 2008)

*Warning to ALL*

I think there are hedgefunds pushing the SP down after closing by 1.8 cents down to 6 cents. Beware, there are plenty punters selling down stock first and buy later at lower price to make a profit. As a result, thank god I sold all my shares when the announcement was made.


----------



## sonicwind (19 September 2008)

What happened here  I put a BUY order in at 0.072 this morning and came back from work to realise the order was executed at 0.06! Doesn't look good here, I think either someone from a hedge fund had punched in a large sell order at the wrong value very late in the afternoon, or Centro is about to collapse??


----------



## vida (19 September 2008)

sonicwind, that is funny your comment that centro may be about to collapse. It collapsed last year but that does not mean it can't revive and get back on track somehow.. it is already collapsed but can be straightened out and I think for all intents and purposes its lenders and management will see to it

The SP is very volatile and will be for a while but after the announcement is made that long term extension has been granted the SP should stay volatile but at higher levels.  I am of two minds about buying more at these levels, I could but I need to keep some money in the bank and I don't want to get too greedy.  I will be happy with recovery of the share value to reasonable levels and I am not out to reap a fortune, just some stability and recovery..


----------



## sonicwind (20 September 2008)

Vida, you were referring to the SP collapse, I was fearing a company collapse.

Even if the SP on Friday retreated very quickly, a BUY order at 0.072 should have been executed at 0.072. But my order was executed at 0.06, that is a verticle 20% drop! My understanding is the only way this could have happened is if someone had put in an extremely large SELL order at 0.06 so that any BUY order above 0.06 was executed at this price. Am I right?

My questions is then why would anyone want to sell for 0.06 when there were buyers wanting to pay a higher price?

Maybe they have some bad news that no one else knows about and wanted to dump their shares at whatever cost?

I just want to share my concerns with you guys as I fear the SP on monday may fall to unprecedented level, although I could be completely wrong. Fingers crossed for anyone who is stilling holding CNP. 

Also I have not been able to view www.centro.com.au since friday afternoon.


----------



## sanj (20 September 2008)

The price only dropped like that at the end of the day during the auction period. Someone was happy to clear of 3 million shares at 3c , 3.5c and 4c. In my opinion I smell a short seller....there are several articles which quote the CEO of Centro giving relatively clear opinions that a extension past 30 sep well be given. This view was also supported by an analyst. Assuming nothing out of the ordinary occurs Monday(bad news) I will double up my holdings. 

I don’t think conditions are going to settle down anytime soon for CNP in terms of volatility until a solid plan is initiated. They would need to announce finance extensions past DEC15 for stability i.e 2 year extensions etc and some good asset sales close to book value like the ones the other day.   

DYOR


----------



## nioka (20 September 2008)

sonicwind said:


> What happened here  I put a BUY order in at 0.072 this morning and came back from work to realise the order was executed at 0.06! Doesn't look good here, I think either someone from a hedge fund had punched in a large sell order at the wrong value very late in the afternoon, or Centro is about to collapse??



 You were probably lucky to get the price of 6c. At the close of trading there were millions of shares listed at 6c as "Portfolio special crossing". That could mean lots of things but is probably transfers between funds where the price is governed more by the value of making the transfer than by the actual value of the shares. Actual ownership or control may have changed little.
 Monday will be a new day. You probably will be able to sell again at a profit. CNP is now a spec stock with great gains possible but with some risk. DYOR


----------



## tulasi74 (20 September 2008)

*Re: Warning to ALL*



$$Punt$$ said:


> I think there are hedgefunds pushing the SP down after closing by 1.8 cents down to 6 cents. Beware, there are plenty punters selling down stock first and buy later at lower price to make a profit. As a result, thank god I sold all my shares when the announcement was made.




You are doing well being a short term trader buying and selling for quick profit. I just hope that you don't find yourself on the wrong side of an announcement.

My personal belief is that hedge funds would not be interested on a penny dreadful which is what Centro is now.  But I do believe that it is in the interest of banks that are considering doing a equity for debt swap at current market prices to push the price down.  If that happens, it will dilute existing shareholders to oblivion.  But Centro CEO can call the banks bluff and let them appoint an administrator as the cost of an administrator plus discount on forced sales plus lost revenue from management contracts that will be voided by such an action might well and truly exceed banks paying even a 500% premium to current share price of 6 cents.

I personally don't think proper valuations can be given for Centro's properties given current market conditions. Despite this, I think its well known that property values in Aust has not fallen more than the US.  Centro have already written down the value of the real estate.

If Centro are still left with net tangible assets of 69 cents after these writedowns, its quite feasible that they should be able to negotiate a equity for debt swap at a 20 - 40% discount to current valuations even if that value cannot be obtained even if a sale is required to be realised now. A 40% discount to net tangible assets of 69 cents means shares could potentially be issued at 40 - 50 cent per share. 

An article in the Herald Sun today makes a very good point that the current market turmoil could be a benefit for Centro rather than a disadvantage as the worsening credit conditions makes it even more difficult for asset sales and appointing an administrator to wind up Centro could take too long and prove very very costly.  It makes more sense for the banks to give Centro a very long extension and take up the equity for debt option and that way take part in any rise in property values.

I think they will be ok.  I missed the 6 cents but I am considering adding more at these prices.

This is just my view.  Please DYOR.


----------



## vida (27 September 2008)

DDay is looming again.  To extend or not to extend. I have already philosophically kissed all my money goodbye in not having sold on the way down to this low SP where even now i could get some of it back, just in case it does get bank support and survives.  

The news is not good today - the journalists again are predicting the axe will fall in light of global financial disaster worsening. However this may just emphasise to the lenders that they will be even further worse off by pulling the plug on the company at this time.  What will they gain by that?  

I have no idea what will happen on Tuesday. I believe this is the cut off date : we can only wait and see.  Depending on the announcement the SP will either spike or the company will be suspended from trading indefinitely

Its getting to feel very much like roulette or the pokies, all or nothing  GOSH

I am looking now at WOW and TLS and ANZ as investment vehicles for 2009


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## $$Punt$$ (29 September 2008)

vida said:


> DDay is looming again.  To extend or not to extend. I have already philosophically kissed all my money goodbye in not having sold on the way down to this low SP where even now i could get some of it back, just in case it does get bank support and survives.
> 
> The news is not good today - the journalists again are predicting the axe will fall in light of global financial disaster worsening. However this may just emphasise to the lenders that they will be even further worse off by pulling the plug on the company at this time.  What will they gain by that?
> 
> ...




What a perfect timing for me today. As anticipated, I have been waiting for the announcement for a while now and was lucky to dispose all my shares when it spiked for a decent profit. I think I had enough of punting on CNP. It is so risky with so much media speculations. I had my lows at times and I am glad I got out of it now. It has been a great forum knowing so many investors out there who still had faith and confidence in the company for the long term. I believe there is future for the company in the long run but I can't wait that long. Good luck guys.


----------



## vida (29 September 2008)

Good for you $$PUNT$$.. Glad you profited from the always on the 'brink' stock that is CNP now.  THe media is really pushing it down and will continue to do it until there is real proof the company has recapitalised and continuing in the future long term.  I am kinda (but just a twinge) regretful that .057c range did not hover around too long so I could decide to buy big at that SP. hahe..hindsight is always great to have.  I will wait until next year to sell and I think/hope it will be ok - somehow I think they will manage but always risky.


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## redandgreen (7 October 2008)

1% cut in official rates, falling aussie dollar, Centro is becoming less risky by the day, especially with a SP in the basement.

This would have to be one of the least "risky" punts on the market ATM.

We are not going to be placed in administration, if we were, it would of happened ages ago.

The worst is OVER..........carpe diam!!!

but always DYOR


----------



## cnpwellwisher (8 October 2008)

redandgreen said:


> 1% cut in official rates, falling aussie dollar, Centro is becoming less risky by the day, especially with a SP in the basement.
> 
> This would have to be one of the least "risky" punts on the market ATM.
> 
> ...




I dont understand how centro benefits from official rate cut of 1%. Does it mean from now it has to pay low interest on the total loan amount ?


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## oldblue (8 October 2008)

cnpwellwisher said:


> I dont understand how centro benefits from official rate cut of 1%. Does it mean from now it has to pay low interest on the total loan amount ?




I would imagine the official rate cut would only affect any floating rate financing, eg overdraft, and then depending on the terms of the loan.
The bigger benefit will be in the general beneficial effect on credit markets, if indeed this occurs and is not swept away by worsening international conditions.


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## cnpwellwisher (10 October 2008)

I have read on few of the news and financial websites that if the centro doesnt receive extension beyond 15th december, it could face administration and fire sale of its asset. 
According to this websites the revenue from this sale would be used to pay up the outstanding debt of australian and US banks. 
Just want to know that in case of fire sales does the centro equity holder get any benefit ???? 
Since last 5 days the share price of CNP is going on decreasing by an average 4-5% daily.


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## sammy84 (10 October 2008)

cnpwellwisher said:


> I have read on few of the news and financial websites that if the centro doesnt receive extension beyond 15th december, it could face administration and fire sale of its asset.
> According to this websites the revenue from this sale would be used to pay up the outstanding debt of australian and US banks.
> Just want to know that in case of fire sales does the centro equity holder get any benefit ????
> Since last 5 days the share price of CNP is going on decreasing by an average 4-5% daily.




I would suggest that given the last week, a loss of 4-5% daily isn't the worst result. I think it is really unlikely that in these current market conditions any bank would want to be engaging in a fire sale. Well that's what I'm hoping.

First post!


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## chops_a_must (10 October 2008)

sammy84 said:


> I would suggest that given the last week, a loss of 4-5% daily isn't the worst result. I think it is really unlikely that in these current market conditions any bank would want to be engaging in a fire sale. Well that's what I'm hoping.
> 
> First post!



Soon, banks are desperately going to need some collateral.

This is one of the easiest decisions they are going to have to make.

CNP is worth less than zero and shareholders wont get anything back I do not think.


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## cnpwellwisher (10 October 2008)

chops_a_must said:


> Soon, banks are desperately going to need some collateral.
> 
> This is one of the easiest decisions they are going to have to make.
> 
> CNP is worth less than zero and shareholders wont get anything back I do not think.




Centro has been paying interest on debt regularly which shows that centro is in good health only the market conditions are not favourable to it. That's the reason US lenders have given $25 million more for capital expenses at the end of september deadline. If they would have thought that centro is worth zero they wouldn't have extended till 15th december and would have recommended fire sale.


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## cnpwellwisher (10 October 2008)

The aussie dollar has fallen 3% against american dollar today. Within last 2 months it has fallen around 25-30 cents against american dollar. Does this help centro in paying the outstanding debt to its australian lender easily ???

Any suggestion on the above issue.....


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## redandgreen (11 October 2008)

The sale of CAF that should have gone through in mid-July, in some ways it's a blessing that didn't.  Even if they have to lower their sale price, the precipitous fall ( 35%) in the AUD since mid July, would make the sale now in terms of debt reduction that much more attractive.  USD sale reducing AUD debt.  

The services business showed  good growth (28%) last year and with the falling AUD should look even better.

In conclusion, this could be one business set to benefit from the weak AUD.


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## cnpwellwisher (18 October 2008)

Recently all the 4 major banks and RBA are cutting down the interest rate. Does this interest rate cut help Centro in anyways.....


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## oldblue (18 October 2008)

cnpwellwisher said:


> Recently all the 4 major banks and RBA are cutting down the interest rate. Does this interest rate cut help Centro in anyways.....




Only on the floating rate part of their borrowings.
See post of 8 October below.

"I would imagine the official rate cut would only affect any floating rate financing, eg overdraft, and then depending on the terms of the loan.
The bigger benefit will be in the general beneficial effect on credit markets, if indeed this occurs and is not swept away by worsening international conditions. "


----------



## bella3496 (22 October 2008)

*CNP  Centro Property Group*

Any views on Centro, potentially a reasonable long term buy??? I am new at trading, have considered Centro as a long term buy, figured at current rate its not a long term risk, welcome any input.


----------



## Julia (22 October 2008)

*Re: CNP  Centro Property Group*



bella3496 said:


> Any views on Centro, potentially a reasonable long term buy??? I am new at trading, have considered Centro as a long term buy, figured at current rate its not a long term risk, welcome any input.



With all the solid, well managed companies out there to choose from, trading at a discounted rate now and likely to fall further, why would you want to buy this failure?


----------



## Ashsaege (22 October 2008)

*Re: CNP  Centro Property Group*



Julia said:


> With all the solid, well managed companies out there to choose from, trading at a discounted rate now and likely to fall further, why would you want to buy this failure?




People become emotionally attached to a company. I know people who kept buying Babcock & Brown everytime the SP fell... there are plenty of good companies out there, don't keep wasting your money on this one!


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## cnpwellwisher (22 October 2008)

Guys an article from yesterday's "The Australian" worth reading :

Centro's servants 

CENTRO'S embattled chairman, Paul Cooper, must be a pretty slick sort of salesman. 

As his chief executive Glenn Rufrano finishes preparations for his New York showdown with Centro's US and Australian banking syndicates, Cooper has gone out and recruited quality personnel to his two boardrooms. 

Cooper has delivered accounting heavyweight Rob Wylie to the board of Centro Properties and South African property guru Avin Leiberman to Centro Properties Trust. 

Both are seriously qualified individuals and would appear unlikely to lend their names to a venture that is without hope. 

The quality of Cooper's appointments last Friday were overshadowed to a degree by the fact that he was forced to recruit by the retirement of longtime Centro servants Peter Wilkinson and Sam Kavourakis. You know the sort of stuff, sinking ship and all that. 

The idea that the departures of Wilkinson and Kavourakis were part of a growing exodus from Centro is fair enough. But it is not quite right. 

The fact is, there is probably no way Centro's bank, here or in the US, would extend life-saving debt relief to the company without boardroom reform. 

Kavourakis and Wilkinson were directors of Centro through the assemblage of this $4.95 billion disaster and the idea that they would continue with the board beyond as settlement the banks' endorsement of the Rufrano plan is ludicrous. 

Meanwhile, Rufrano might draw some encouragement from a deal nutted out between Australian mini-tech Hyro Limited and the liquidator of Lehman Brothers. 

Rufrano, remember, is looking to relieve Centro of about $200 million a year of interest payments in a debt-to-equity swap with his major bankers. 

And that is exactly what the Lehman liquidator has delivered to little Hyro. Instead of potentially busting Hyro by forcing the repayment of a $20 million convertible note Hyro had with Lehman, the liquidator has accepted an upfront cash payment of $1.2 million and a two-step capital issue equivalent to 17 per cent of the company. 

Which only goes to prove, even in this dreadful, gloomy market, that where there is life, there is hope. 


http://www.theaustralian.news.com.au/business/story/0,,24526895-20142,00.html


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## Aussiejeff (23 October 2008)

Local Wodonga News.

FOR SALE:/

*Centro Birrallee* and *Centro Wodonga*. 

Buyers Urgently Wanted.

*Going Cheap, Cheap* ...



I wonder who will be cashed up and wiliing to fork out for these gems and all the other Centro shopping centres to come up for sale (and presumably, other name brands that fall by the wayside) which will likely start flooding the consumer retail section of the economy sometime soon?


----------



## Stan 101 (29 October 2008)

*Re: CNP  Centro Property Group*



Julia said:


> With all the solid, well managed companies out there to choose from, trading at a discounted rate now and likely to fall further, why would you want to buy this failure?



 Becuase I like the the intra day spread hehe...



> People become emotionally attached to a company. I know people who kept buying Babcock & Brown everytime the SP fell... there are plenty of good companies out there, don't keep wasting your money on this one!




This share has been my best performer in the second half of this year... I wouldn't call that wasting my money.

Yes there are more solid long term performers out there with much less risk. Read the fine print and know what you may lose not only on this share, but all shares.


----------



## chops_a_must (29 October 2008)

*Re: CNP  Centro Property Group*



Stan 101 said:


> Yes there are more solid long term performers out there with much less risk. Read the fine print and know what you may lose not only on this share, but all shares.



You are well aware aren't you that ANZ apparently in its last quarterly report or whatever it was, basically prepared the way for closing out on CNP aren't you? Meaning, they have already written it off completely, and will be unlikely to extend any more losses to CNP.


----------



## Stan 101 (29 October 2008)

*Re: CNP  Centro Property Group*



chops_a_must said:


> You are well aware aren't you that ANZ apparently in its last quarterly report or whatever it was, basically prepared the way for closing out on CNP aren't you? Meaning, they have already written it off completely, and will be unlikely to extend any more losses to CNP.




Thanks for watching my back, Chops. I intend on finding another share to trade before december 15, but the important part of my post was the words "Intra" and "Day"...


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## aleung9 (30 October 2008)

Correct me if i'm wrong here but from my understanding ANZ has an exposure of 1.2 B $ to centro in debt. Of that amount 680 million is unsecured and 520 million is secured.

As of the last quarterly report, ANZ set aside an extra 360 million for subprime exposures, this amount was not even explicitly set aside for centro. 

How does that equate to completely writing off centro already?


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## Nathan_b (30 October 2008)

Alex welcome aboard....

I reckon we will still be talking about the next extension come mid next year, i think there is tto much blood on the banks hands atm, to cause more, especially when they are meeting all servicing requirements and turning profit..


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## Stan 101 (27 November 2008)

I've just sold out of CNP at 7.4 cents after a good purchase price yesterday.
I was thinking this was going to be my last snatch and grab on this stock until things settle after the december 15 deadline.
It's jumped over 45% today with good trading levels. Has anyone heard any inside info on whether their debt looks like getting refinanced? I know they employed some big movers and shakers in from the finance market to steer them through this turmoil..Someone's confident.Still no official announcement, though.


cheers,


----------



## webclever (5 December 2008)

http://www.borderwatch.com.au/archives/1938
Centro plaza for sale at the right price.

5 trading days to go......before (debt refinancing extension?).


----------



## webclever (12 December 2008)

Interesting gain today with no announcement yet. I think people are betting a good announcement on Monday. Would it trigger more gain as it did BNB announcement?


----------



## drsmith (12 December 2008)

Centro may get a brief stay of execution.

http://www.theaustralian.news.com.au/business/story/0,28124,24781992-36418,00.html


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## drsmith (13 December 2008)

And this.

http://www.theaustralian.news.com.au/business/story/0,28124,24791824-5001641,00.html

Also of interest is that as part of a recapitalisation, Macquarie Office Fund (MOF) sold a US office tower at a 22% discount to June 30 2008 valuation with part proceeds paid to MOF allready and the remainder to be paid in the future (some time in 2009). While not retail is does beg the question as to how much better (or worse) the banks would go in selling the large real estate assets of Centro from administration.

It will be interesting to see by Tuesday whether Centro is still on life support or dead. The pain of death might be more than the banks are prepared to bare at the moment.


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## skc (13 December 2008)

webclever said:


> Interesting gain today with no announcement yet. I think people are betting a good announcement on Monday. Would it trigger more gain as it did BNB announcement?




Take a look at where BNB is now!!! The average punter lost money on the first day. You have to be extremely quick and lucky to make any profit.


----------



## webclever (16 December 2008)

Centro successful with extension. Tomorrow is a good day for some CNP holders who bought it on Friday.

http://business.theage.com.au/business/centro-debt-deal-all-but-done-20081216-6zfy.html


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## Lucky_Country (16 December 2008)

Centro has been saved long term debt structure.

Still reading announcement but looks good for a big run tommorrow.

Well done to all holders.


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## gfresh (16 December 2008)

No distributions to shareholders until conversion of hybrid securities until 2015.. 

Hybrid securities, when converted at some point before 2015 will give the banks 90.1% of Centro..

All shareholders are effectively now very minority shareholders  Seems ridiculous it's actually still running as an entity, but it's not for the benefit of shareholders that's for sure. 



> The outcome provides a future for Centro and retention of some value for our existing shareholders and is superior to the prospect that Centro otherwise faced of entering administration or liquidation.”




How nice of them...


----------



## Lucky_Country (16 December 2008)

Centro Properties secures lifeline
TOP News
Centro Properties secures lifeline 7:10 PM 
Commonwealth Bank raises $2bn 7:39 PM 
PBL Media receives $335m capital injection, Packer holding falls below 1% 3:41 PM 
Aust stocks close 1% lower 4:18 PM 
RBA sees inflation falling below 2.5% by middle of 2009; January meeting unlikely 1:05 PM 

The Spectators
A tonic for the times
Gottliebsen: Black and gold value
Don't believe the hype
Kohler: Dead heat
Gottliebsen: Conroy digs in
By a staff reporter, with Reuters 

Centro Properties Group Ltd has secured a lifeline from its bankers, with a one-month extension on all of its facilities part of an agreement in principle to initiate a restructuring plan. 

The embattled shopping centre owner has been given a one month interim extension to all of its facilities that expired on December 15 to allow for time for documentation of the re-financing and stabilisation. 

Centro has about $2.3 billion of debt and owes a further $A684 million ($US450 million) to private US-based noteholders. 

Centro said that no assurance can be given that the documentation will be completed or that the final terms will not be different from those released to the market today. 

Centro chairman, Paul Cooper, said the outcome reached with the group's financiers will provide a future for Centro and is a better case scenario than a full-blown collapse. 

"The outcome provides a future for Centro and retention of some value for our existing shareholders and is superior to the prospect that Centro otherwise faced of entering administration or liquidation,” Mr Cooper said. 

Chief executive, Glenn Rufrano, said the company now has the liquidity and time to maximise the business and pursue an alternative recapitalisation strategy. 

"This outcome will stabilise Centro and provide sufficient liquidity with time for the company to maximise the value of its property operating platform and funds management business," Mr Rufrano said. 

"This transaction also provides the opportunity to pursue an alternative recapitalisation strategy in a more favourable economic environment," he said. 

Mr Rufrano told said Centro was still trying to sell shopping malls in Australia and the United States. 

"We will continue to try to transact, and we may have some success," Mr Rufrano said. 

The Commonwealth Bank of Australia, owed $1.2 billion, has been a notable opponent to the property group’s proposed plan to swap debt for hybrid equity. 

Centro’s temporary retrieve gives some indication that the three-tiered banking syndicate, owed $5 billion by Centro, hopes to salvage some value from the struggling company. 

Centro's shopping centres have so far managed to hold their head above the water amid the turmoil and it does have strong underlying assets. 

Centro shares were in a trading halt pending the release of the announcement to the market. 

The group's shares last traded at 8.7 cents on Friday.


----------



## just a thought (16 December 2008)

Lucky_Country said:


> Centro has been saved long term debt structure.
> 
> Still reading announcement but looks good for a big run tommorrow.
> 
> Well done to all holders.




You think?
According to my cals  there is about 822,222,222 shares currently on issue. For 75% (90.1-14.9) of this shares (ie for 616,666,666) the banks are paying $1.05 mil + 7years  of compond interest (say at 7%pa), which comes to about$1,654,555. this works out to be less then $0.002 cents per share. You think it is good value for share holders?


----------



## just a thought (16 December 2008)

"
Centro’s temporary retrieve gives some indication that the three-tiered banking syndicate, owed $5 billion by Centro, hopes to salvage some value from the struggling company. "

I bet, at $0.002 cents a share even at todays price the banks share is worth over $4.3 mil. Not a bad deal!.......for the banks that is!

Lets face it there is not that much risk for the banks at $0.002 a share how much further can it fall?


----------



## drsmith (16 December 2008)

The interest being capitalised on the $1.05 million convertable bonds is interesting in that it raises the question as to whether Centro's income into the future would have been sufficient to cover the interest on it's debt.


----------



## ROE (17 December 2008)

banks just milk every pennies centro earns and when they cant milk any more time they come in and shut down the shop.

Why such short extension one after the other?

There is nothing left for shareholders now that it reach this state.

Banks will continue to put out their hands for every single cents that Centro earns and if Centro dont hand it over, they shut down the shop and they shutdown the shop if Centro run out of money...win win for bank.lose lose for shareholders.


----------



## thunderer (17 December 2008)

If the term is not paying dividend, I would rather vote against it.
Let them do fire sale, let the property market collapse, then I can buy my first home cheaper which might cover my loss.
Banks get the whole lot, managers get a secured job, what do investors get?


----------



## Aussiejeff (18 December 2008)

thunderer said:


> If the term is not paying dividend, I would rather vote against it.
> Let them do fire sale, let the property market collapse, then I can buy my first home cheaper which might cover my loss.
> Banks get the whole lot, managers get a secured job, *what do investors get?*




Answer = NO DIVIDEND.                                  

Down 20% so far...                                

(not holding)


----------



## Lucky_Country (18 December 2008)

Definately a long term hold on CNP to try to recover any real value.

A few things to remember though are that CNP is just above its low in the cycle with the granting of the extension.

GR now has the chance to rebuild this company.

Centres are generally holding up well.

CNP are still profitable.

Yes I know its going to be a long road but it may become worth while.


----------



## drsmith (18 December 2008)

The problem for shareholders is that if it's assets were sold in the present market there would most likely be a deficit between borrowings and the proceeds of sale. This ground has to be made up before any value can be restored for shareholders. At least time offers the hope that the above ground can be made up with an improvement in economic conditions.

With regard to profitability I'm interested in commentary as to why the banks have agreed to capitalisation of interest on the $1.05b of preferred equity rather than the ongoing interest payments.

I don't have a holding in Centro but I do have a holding in Westfield. I feel GR has done the whole LPT sector and perhaps the banking sector a favour by preventing a bank fire sale of Centro's assets at the present time.


----------



## tigerboi (19 December 2008)

*Re: CNP-shareholders now nothing but peasants*

Why would this be a long term hold?people should read the details...banks are getting 90% which means???

they can compulsory takeover your shares.

reckon this is a worse deal than a fire sale...tb


----------



## thunderer (1 February 2009)

How to interpret this? 

http://www.costar.com/News/Article.aspx?id=412A4004754521AD724E4E1A9B98A987

It seems banks are doing whatever they like now.


----------



## drsmith (1 February 2009)

It would be interesting to know what Centro's carrying value of that centre was.

Taking a quick look at CNP's and CER's most recent annual reports I could not see a breakdown of the carrying value of the individual centres.


----------



## oldblue (2 February 2009)

thunderer said:


> How to interpret this?
> 
> http://www.costar.com/News/Article.aspx?id=412A4004754521AD724E4E1A9B98A987
> 
> It seems banks are doing whatever they like now.




I interpret that as being what the market for these properties is in the US at present.
The sale price was quoted as 40% below replacement cost but note that the centre had recently lost its anchor tenant and was only 85% let. Not a great time to be letting commercial space!


----------



## andione1983 (25 February 2009)

Any chance this is a good sign today for Centro thats its Manager has been resigned for another year?


----------



## andione1983 (25 February 2009)

i see Centro in the USA has just sold 3 propertys, one for 6.5mill, one for 12.5mill and the other for 8mill or so? is this a good or bad thing?


----------



## Lucky_Country (25 February 2009)

Good news GR has saved SNP from going under now he can rebuild and we will all profit !!!!

He will be happy based in the USA and may even be better for the company afterall alot of the resource CEOs spend more time in the UK than AUS !!


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## Aussiejeff (26 February 2009)

> *CENTRO Properties Group has reported a $2.4 billion first half loss as the shopping centre owner was hit by falling property values, slumping derivative values and losses from the movement in exchange rates.
> 
> Centro's net asset value declined to negative $346 million according to the results which incorporate both Centro Properties Ltd and Centro Property Trust, the Melbourne-based company said.*



http://www.news.com.au/business/story/0,23636,25108766-14334,00.html

How will this worrysome bottom line affect expected extensions of bank credit?


----------



## oldblue (26 February 2009)

andione1983 said:


> i see Centro in the USA has just sold 3 propertys, one for 6.5mill, one for 12.5mill and the other for 8mill or so? is this a good or bad thing?




That depends on whether they sold the properties for more than or less than their valuations. I havn't seen any detail on this but provided the sale prices were close to valuation, and that the valuations hadn't been heavily reduced recently, it should probably be viewed as a mildly " good thing ". The amounts aren't very significant in the overall situation and the latest reported loss.


----------



## oldblue (26 February 2009)

I see that in the midst of all the red ink reporting the first half loss of $2.4b, the company says they sold 36 US and 6 Aust assets for $482m during the period at a 7.1% loss on the book value as at 30 June 2008.
Not too bad in the circumstances, IMO, although the risk is that they have sold the most attractive and easily sold assets so far.


----------



## ricee007 (7 May 2009)

Holy hell...

CNP indicative price of $0.10!!!

Wow. 250% climb from the bottom...

Anyone know why?


----------



## ricee007 (7 May 2009)

On 4th may, it was 6.7c, now it's 12c on the 7th May...

It went up 25% yesterday...

Then today, an announcment was released, and it went up another 25%.

Nothing suss?

However, I don't understand how todays announcment can be a good (or bad) thing though?

Anyone able to explain it to me please?


----------



## comptec (7 May 2009)

maybe investors are more confident? less interests to pay because of the assets sale etc..?

umm.. value of the share is questionable, but having said that there will always be time for over price shares 

and that is where if you jump in and out at the right time there is money to be made (for day traders)

I think it will probably go right upto .16 cents before it correct itself (at least that is what I'm betting on)


----------



## Kremmen (7 May 2009)

ricee007 said:


> However, I don't understand how todays announcment can be a good (or bad) thing though?




US retail figures have been expected to be awful across the board. The figures there aren't nearly as bad as the worst case expectations, and the growth in supermarket sales in the US, in particular, have to be a surprise to the market. CNP's income is looking much better than most would have expected. The real question is whether this is enough to matter to investors, with most of the company being given away to the banks anyhow.


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## ricee007 (7 May 2009)

Kremmen said:


> The real question is whether this is enough to matter to investors, with most of the company being given away to the banks anyhow.



And whats the answer to this question, in your opinion? Is it enough to matter? I bought $2100 worth, and its now worth $300 (rough numbers).... I missed my opportunity to shove a stop loss in. Recently it was worth $204, and not worth selling.

I've said for last few months its worth pocket change, I might as well keep it.... 

I'm going to have a VERY hard time realising a capital loss of $1500 if it goes up double what it is now...

Hmmm


----------



## nomore4s (19 May 2009)

Please Note - All posts discussing CER have now been moved to the CER thread.

Please post in the relevent threads when discussing these 2 stocks.

Thanks for your help.


----------



## YELNATS (13 August 2009)

CNP is up about 100% this week from about 9c to as high as 18.5c today. 

A preemptive letter from the company has been sent to the ASX indicating they have no knowledge of why there has been such an increase in price and volume.

Not looking a gift horse in the mouth, I have taken the opportunity to offload about half of my holding.

Does anyone have any ideas of why the sudden interesrest in CNP?


----------



## ricee007 (13 August 2009)

Yellnats. I want to sell, but my $400 or whatever it is worth isn't worth bothering about.

If it goes good... win. If it doesn't.... I've made more profit today than I own in CNP shares.....


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## SmoothZT (2 September 2009)

Was actually contemplating investing about $5,000 @ 16c per share into this company with the "hope" it would one day return to its prime value it was once at. Surely if it hasnt gone down by now, it could be one of those "I made it rich by investing in the Battered and Bruised Centro 10 years ago" stories.

Any thoughts, Money going into the bin? let me know


----------



## drsmith (2 September 2009)

SmoothZT said:


> Was actually contemplating investing about $5,000 @ 16c per share into this company with the "hope" it would one day return to its prime value it was once at.



Not a hope in hell.

Centro's existing shareholders have been heavily diluted as a consequence of a recapitalisation deal with it's lenders.


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## etingsoon (3 September 2009)

SmoothZT said:


> Was actually contemplating investing about $5,000 @ 16c per share into this company with the "hope" it would one day return to its prime value it was once at. Surely if it hasnt gone down by now, it could be one of those "I made it rich by investing in the Battered and Bruised Centro 10 years ago" stories.
> 
> Any thoughts, Money going into the bin? let me know





Hope might return one day, but no one know when will that going to happen. May be after 20 years of investment, plus another economic crisis plus all other issues. No one will know...


----------



## oldblue (3 September 2009)

Yes, I'm afraid that most of the recovery potential has been sucked out of CNP by the heavy dilution that "we had to have." This will now accrue largely to the financiers who have become equity holders with 'Old" shareholders having to be satisfied with a small share.

Disc: Small holding, hardly worth selling.


----------



## reaymeister (18 September 2009)

I bought 100,000 shares recently at 9.4 cents each, based on the moving average indicators. Sold them at 18 cents each within a couple of weeks. Not a bad profit.  Since then they have been trading within a very small range and low volume, compared to the recent spike. They do not seem to be a buy yet, but who knows what may happen.


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## Looingforvalue (19 September 2009)

About switching to CER, which hasn't been diluted by the banks. US retail sales recovering and not inconceivable that the US shopping assets will be bought by some one, at close to written down value. Aussie centres are the real gem with 99.4% occupancy. Latest NTA 30 cps, and operating profit per unit 8c! Could be a real sleeper this one.


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## Kremmen (23 September 2009)

oldblue said:


> Yes, I'm afraid that most of the recovery potential has been sucked out of CNP by the heavy dilution that "we had to have."




I agree. The dilution and the long road to recovery by US retail sector should give them a long road to recovery. Yet, somehow, they have rocketed up and touched 31c today. WTF?! Heavy volume the last few days too. I wonder who's buying?


----------



## nulla nulla (23 September 2009)

Kremmen said:


> I agree. The dilution and the long road to recovery by US retail sector should give them a long road to recovery. Yet, somehow, they have rocketed up and touched 31c today. WTF?! Heavy volume the last few days too. I wonder who's buying?




Maybe its' the Lowry family looking to hedge their potential losses on BBI preference shares? Maybe it's SGP preparing a take over because they aren't sure of taking over GPT, FKP or VPG.


----------



## vincent191 (23 September 2009)

Maybe the Chinese are going to buy CNP?? Very cheap at current valuations. Surely the price of property has to recover sooner rather than later?  If I had a few trillion dollars I will be looking at picking up a few prime shopping centers at bargain prices, wouldn't you?


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## drsmith (23 September 2009)

I find it difficult to be positive in the long term on commercial property. Large office buildings are largely dependant on the amount of finance industry/management fat within organisations and retail is dependant on the over-leveraged consumer.

As a holder of Westfield it is my intention to sell at some point in the current rally. That though will be a difficult decision when the day comes as the Lowys have been leaders in their field.


----------



## andione1983 (23 September 2009)

i am finding this astonishing... lol i brought these 6 months ago, for 8c and sold out at 7cents, thinking they were doomed, and just looked at their share price today :O is all i can say!!!


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## adobee (24 September 2009)

CNP going crazy.... 
who know whats going on ?!!?!?!  could it be someone who shorted it a long while back ??? I am not familar with the process...

Either way I am taking a punt on it and having a trade.. see if we can get a quick buck ...


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## vincent191 (24 September 2009)

adobee said:


> CNP going crazy....
> who know whats going on ?!!?!?!  could it be someone who shorted it a long while back ??? I am not familar with the process...
> 
> Either way I am taking a punt on it and having a trade.. see if we can get a quick buck ...




If you believe there is no insider trading then you still believe in Santa Claus. Somebody knows something!!!


----------



## adobee (24 September 2009)

bought in 44c jumped out 51.5c left the profits in to run... see what happens...  hopefully finish up with some cash and not a tumble back to nothing ...


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## prawn_86 (24 September 2009)

investor.123 said:


> do you guys think it is a good time to buy in now at 44c? still a newbie trader with quite a small trading budget. Does it look like itll go back up to 55c?




Please note that members cannot make buy and sell recommendations as it is against ASIC laws. 

As you are a new member i suggest you read the site rules and posting guidelines.

Thanks

Prawn


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## adobee (24 September 2009)

prawn_86 said:


> Please note that members cannot make buy and sell recommendations as it is against ASIC laws.
> 
> As you are a new member i suggest you read the site rules and posting guidelines.
> 
> ...




Please also note all my trades are pure gambles. I have no trading knowledge and buy purely on speculation when I see frenzied buying..


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## oldblue (24 September 2009)

vincent191 said:


> If you believe there is no insider trading then you still believe in Santa Claus. Somebody knows something!!!




I don't think that's necessarily so.

Anyone who experienced the Poseidon boom in the late sixties will know that sometimes a market develops a momentum of its own, either for a particular stock or for the market as a whole.
It's true that there was an element of insider trading (Tasminex springs to mind) but the euphoria was largely due to "irrational exuberance", to use Alan Greenspan's famous phrase.


----------



## skyQuake (24 September 2009)

Rumours of possible cap raising, everyone wants to be on the register. Also, breakoouttttttttttttttttttt


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## lukeaye (24 September 2009)

what does everyone think of cnp now? that long tail scares me. might be about to pull back, is it to late now to jump in now? thats the question. i think ill wait


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## investor.123 (24 September 2009)

lukeaye said:


> what does everyone think of cnp now? that long tail scares me. might be about to pull back, is it to late now to jump in now? thats the question. i think ill wait




lol i wish i had held back instead of impulse buying....... Bought shares at 44.5c and now losing money. Hope it goes back up tommorow with all these rumours...


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## skyQuake (24 September 2009)

investor.123 said:


> lol i wish i had held back instead of impulse buying....... Bought shares at 44.5c and now losing money. Hope it goes back up tommorow with all these rumours...




It was a momentum play, buying at 44.5c on the wap UP was a good idea. On the way down = suicide. The long tail is extremely worrisome. Volume may also be exhaustive. 1/5 of the free market cap got traded today.
While it may recover tomorrow, Imo its gonna be an inside day. (Between todays lows and highs)


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## drsmith (24 September 2009)

skyQuake said:


> Rumours of possible cap raising, everyone wants to be on the register. Also, breakoouttttttttttttttttttt



Looking at the June 30 balance sheet I don't want to be on the register.

The number at the bottom has got brackets around it.


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## Kremmen (24 September 2009)

US news reports in the last couple of days have been saying that commercial property (esp. retail shopping centres) still haven't hit their bottom, (possibly) unlike residential. As so much of CNP is in the US, the current price just makes no sense that I can see.


----------



## Saucebottle (25 September 2009)

reaymeister said:


> I bought 100,000 shares recently at 9.4 cents each, based on the moving average indicators. Sold them at 18 cents each within a couple of weeks. Not a bad profit.  Since then they have been trading within a very small range and low volume, compared to the recent spike. They do not seem to be a buy yet, but who knows what may happen.




Reaymeister could of made a lot of money if he stopped gambling and held for a few months.. Let me do the math, 100.000 x .50 = 50.000.  Wow 40000 in a three months..


----------



## investor.123 (1 October 2009)

does anyone know what the changing of the board of directors would have on the share price? Such as the announcement made today. 

Can someone please enlighten me as i am quite new to share trading


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## TomG (1 October 2009)

CNP has seen some very heavy volume recently. Speculators seem to loving this stock atm. I wonder if there is another breakout on the horizon.


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## oldblue (2 October 2009)

investor.123 said:


> does anyone know what the changing of the board of directors would have on the share price? Such as the announcement made today.
> 
> Can someone please enlighten me as i am quite new to share trading




I wouldn't expect any particular board change to have much influence on CNP's SP.

The company's problems are longterm and deep seated and will only respond to time, an improving economy and improving property prices. The immediate danger has been averted at the cost of converting debt to equity to the point where the financiers now own about 90% and the "old" shareholders only 10%. Speculation may drive the SP from time to time but I reckon they're probably pretty fully priced at current levels.

Just IMO.


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## nioka (2 October 2009)

oldblue said:


> the financiers now own about 90% and the "old" shareholders only 10%. .




Not exactly right. There is time for CNP to avoid the dilution if the companies debts can be refinanced.The debt for equity arrangement does have an "out". If the debts cant be paid then the dilution will occur. The recent spike in the SP suggests that the dilution may be avoided. Anyone interested should read the full details or the finance arrangements made with the banks when administration was avoided last year.


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## oldblue (2 October 2009)

That's also right as far as it goes.

But the holders of the hybrid securities have a right to retain them if CNP are able to refinance and seek to redeem them. This right seems to me to override CNP's rights in the matter.
For practical purposes, I'm working on the assumption that the hybrids will become stapled securities in due course. If there's speculation to the contrary from time to time, so much the better!


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## thunderer (8 October 2009)

If that's the case, the higher the share price goes and the better property recovers, the more likely banks turn the bond into equity.
Will banks be so generous to show mercy on old share holders?
If you are the banker, what will you do?

And if you look at the way the volume burst out today, very weird. There is no positive news, how come suddenly all the people are buying and then retreat.


----------



## adam.francki (30 April 2010)

Gone a bit quiet on this forum?  Have a question, property values in america stabilized a bit in last quater announcement. Ive noticed CNP price has jumped slightly in the last couple of weeks and was wondering if this had anything to do with it.  Unfortunately I bought these shares earlier this year at the wrong time (29c) I'm in it for more medium to long term as I hope Centro may recover from GFC and property prices will start to pick up.  Any thoughts would be appreciated. Thanks.


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## AngusSmart (30 April 2010)

I wouldnt worry too much i got in at 1.40, going to be a long long term thing for me. apparently they think by the end of this year things will start looking a little better for the company.. but who knows whats going to happen now. Usa's not out of the deep end yet.


----------



## drsmith (30 April 2010)

IIRC Centro did a deal with its lenders in late 2008 that gave most of any potential upside to them.

I have not followed it recently though.


----------



## oldblue (1 May 2010)

drsmith said:


> IIRC Centro did a deal with its lenders in late 2008 that gave most of any potential upside to them.
> 
> I have not followed it recently though.




That's right.

From memory, the dilution resulted in something like 90% of the equity ending up with the lenders when they exercise their rights, as they surely will.

I don't see any great upside in CNP, for this reason.


----------



## nioka (1 May 2010)

oldblue said:


> That's right.
> 
> From memory, the dilution resulted in something like 90% of the equity ending up with the lenders when they exercise their rights, as they surely will.
> 
> I don't see any great upside in CNP, for this reason.




Note; Not exactly right. The refinancing arrangement is a complicated one. As I see it the debt for equity arrangement means that debt not repaid or refinanced by a certain date into the future would/could be converted into equity. So the dilution factor is not a certain one and could possibly be avoided in part if not in total.

Anyone interested should do more research on this matter as some statements made on forums such as these may be misleading.


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## nioka (26 July 2010)

From today's Business Spectator

"The market has been patiently awaiting a progress report from Centro Properties Group on its planned restructure and there is talk that the beleaguered shopping centre owner could be close to deal to rehabilitate its debt position. The Australian reports that Centro is on the hunt for a partner to manage and jointly own a $1 billion property portfolio. Industry sources have told the paper that Centros banking advisers Moelis & Co and JPMorgan were expected to release a full information memorandum shortly. Centro was one of the high-profile casualties of the global financial crisis, nearly crushed by its $3.9 billion debt burden and while it has since been able to steady the ship, the future of the property group is widely seen to hinge on its planned restructure. Centros new CEO Robert Tsenin, who has kept a low profile since taking the top job in January, is expected to provide an update in August. But the AFR suggests that some of its lenders may not be quite as hopeful that a restructure will provide a remedy. The paper said that the recent move by one of Centros main lenders, Royal Bank of Scotland, to sell its $US550 million parcel of unsecured debt at half price was a sign that lenders were losing patience. RBS sold its debt parcel for $236.5 million last week and the AFR reports that Centros remaining lenders JP Morgan, ANZ, CBA , NAB, BNP Paribas and Sumitomo WestLB have appointed their own investment bank to advise on where things stand with Centro."


----------



## AngusSmart (26 July 2010)

Its got a fairly large depth on the buy side..

i'd love to average down on this but am still a bit scared and will put money elsewhere untill more hope about this stock is out.


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## OK2 (26 July 2010)

Westfield have been rubbing their hands in anticipation of this. Centro shopping centres are a mess, simply visit one and look at how poorly maintained and managed they are compared to Westfield centres.


----------



## noie (30 July 2010)

Information out Yesterday including a "Response to an ASX Price Query"

in Super summary, DYOR

Centro - CNP Financing and Restructure Update July 2010 

They provided a nice US financing update (in US$)
CNP has completed financing arrangements for approximately $2.7 billion of the $3.2
billion of debt within Super LLC
CNP has secured a one-year extension from 31 December 2010 to 31 December 2011
for $2.3 billion of debt within Super LLC

they are looking to Restructure
As previously announced, an assessment of restructure alternatives for the Group
commenced in early 2010 with the objective of identifying the means by which the
enterprise value of the Group could be maximised, including recapitalisation options, and
to consider and analyse execution risks


Sorry the important bit, Currently -7% today 
(i got in yesterday after a trigger and before the announcement)


----------



## Corina86 (29 October 2010)

*CNP - Centro*

What's happening with Centro? The price has been stable for a little while now. What are peoples views of where it will be sitting in 1, 2 and 3 years time?

At 16.5 is now a good time to get in? 

Who believes it wont recover and why? Who think's it's a good investment at this price?


----------



## Kremmen (4 November 2010)

*Re: CNP - Centro*



Corina86 said:


> What's happening with Centro? The price has been stable for a little while now. What are peoples views of where it will be sitting in 1, 2 and 3 years time?




I think that's one of the hardest questions you could ask. It depends on our economy, the US economy, US retail in particular, plus interest rates for their huge debt and any possible restructuring. Roll the dice on this one.

It seems from my reading of the situation that CER is in a much better situation. (Hence I hold CER and not CNP.)


----------



## Tekwrek (4 November 2010)

*Re: CNP - Centro*



Kremmen said:


> I think that's one of the hardest questions you could ask. It depends on our economy, the US economy, US retail in particular, plus interest rates for their huge debt and any possible restructuring. Roll the dice on this one.
> 
> It seems from my reading of the situation that CER is in a much better situation. (Hence I hold CER and not CNP.)




Yes CER touched 20.00 cents today, but CNP has greater potential, i hold both, remember what these stocks were worth before the meltdown.


----------



## oldblue (4 November 2010)

*Re: CNP - Centro*



Tekwrek said:


> Yes CER touched 20.00 cents today, but CNP has greater potential, i hold both, remember what these stocks were worth before the meltdown.




Two points there.

Don't confuse shareprice with value.

CNP has taken on a huge amount of debt since and a lot of this is potentially going to result in massive dilution for current shareholders if it ends up being converted to equity.


----------



## noie (4 November 2010)

*Re: CNP - Centro*



oldblue said:


> Two points there.
> 
> Don't confuse shareprice with value.
> 
> CNP has taken on a huge amount of debt since and a lot of this is potentially going to result in massive dilution for current shareholders if it ends up being converted to equity.




Just the one point

Don't confuse Debt with Loss

Show me a Property stock in Australia with land and assets in the US and AUS without debt.


----------



## nioka (4 November 2010)

*Re: CNP - Centro*



noie said:


> Just the one point
> 
> Don't confuse Debt with Loss
> 
> Show me a Property stock in Australia with land and assets in the US and AUS without debt.




The problem with the debt of CNP is that it exceeds the NTA. Not a happy situation to be in when you are talking to your very edgy lenders. 

CNP has assets of $1.69billion but liabilities of $2.46billion. CER has assets around the same value but liabilities of $1.98. Those figures talked me into recently selling out of CNP and buying more CER. CER is tarred with the Centro name because of this. CER ,I believe, will survive but I'm not so sure about CNP. One of CNP's largest assets is its 51% shareholding in CER. Its biggest liability is its association with SuperLLC.


----------



## Tekwrek (4 November 2010)

*Re: CNP - Centro*



oldblue said:


> Two points there.
> 
> Don't confuse shareprice with value.
> 
> CNP has taken on a huge amount of debt since and a lot of this is potentially going to result in massive dilution for current shareholders if it ends up being converted to equity.




CNP up 12.50% to 18.00 cents today, and CER up 17% to 21.00 cents also today not a bad WINDFALL. Most Aussies have 80% debt on their homes does that call for panic.


----------



## ParleVouFrancois (4 November 2010)

RE: Noie, I think you don't understand how the property business model works, it's unfeasible to fund a property company with 100% equity as the returns are too low.

So what the company does is borrow at say 6%, buy property, collect the 8% rent and add this to the equity pile, using somewhat aggressive lending, you can take a boring 8% return on equity and spruce it up to 12% making it more appealing to income investors, but perversely making it less stable. The problem arises when there is a lack of credit, or the credit is too expensive, then the whole stack of cards crumbles down (which is what we've been seeing post-GFC in most property shares).

That being said they usually are a somewhat stable investment, but similarly to exploration juniors in resources, quality management is a must.


----------



## Julia (4 November 2010)

ParleVouFrancois said:


> So what the company does is borrow at say 6%, buy property, collect the 8% rent and add this to the equity pile, using somewhat aggressive lending, you can take a boring 8% return on equity and spruce it up to 12% making it more appealing to income investors, but perversely making it less stable.



Could you give an hypothetical example (or a real life one for that matter) of the above, step by step, including where the 8% return is derived, and how it is 'spruced up' to 12%?


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## skc (2 March 2011)

Didn't they just announced that there is only $100m available to the CNP shareholders, junior creditors, and class action settlement? With 972m shares on issue, how much of that is leftover to the shareholders??

An SMH article put the share value at 1c...and it traded up to 18c yesterday. Some retail holders just have no clue.


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## skc (2 March 2011)

Julia said:


> Could you give an hypothetical example (or a real life one for that matter) of the above, step by step, including where the 8% return is derived, and how it is 'spruced up' to 12%?




Buy a $1m property using 90% debt.
Equity = $100K
Debt say interest rate of 7.5%, so annual interest cost = $67.5K
Rental return = 8% ($80K) which is quite achievable for commercial properties

So the net return is $12.5K on my equity of $100K = 12.5%

QED


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## oldblue (2 March 2011)

*Re: CNP - Centro*



Tekwrek said:


> CNP up 12.50% to 18.00 cents today, and CER up 17% to 21.00 cents also today not a bad WINDFALL. Most Aussies have 80% debt on their homes does that call for panic.




The reality of the situation is hitting home now.

CNP has considerably more than 80% debt on their properties. In fact yesterday's announcement confirmed that it's a negative equity situation and the market is reacting accordingly.


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## nioka (2 March 2011)

The way I read the latest announcements I see CNP as "history". The company should come out with an announcement setting out clearly the position. Maybe the board and management are too busyvacating their desks to think about shareholders!.


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## godzillaismad (24 March 2011)

What's with the latest trading halt? Can't find a reason for it on anywhere. Anyone?


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## oldblue (24 March 2011)

godzillaismad said:


> What's with the latest trading halt? Can't find a reason for it on anywhere. Anyone?




CNP requested the halt while they compose an answer to the ASX's "please explain the recent shareprice movement".

Probably nothing more than more speculation.


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## drsmith (24 March 2011)

Where's the pls explain ?

There's nothing on CNP's recent announcements.


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## nulla nulla (24 March 2011)

I look at cnp and i am reminded of how far bbi fell before they found a cornerstone investor and everyone else got paid out at $0.04c per share.


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## oldblue (25 March 2011)

drsmith said:


> Where's the pls explain ?
> 
> There's nothing on CNP's recent announcements.




Correct.

It's referred to in the Trading Halt announcement though. Probably an oversight on CNP's part.


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## drsmith (25 March 2011)

oldblue said:


> It's referred to in the Trading Halt announcement though. Probably an oversight on CNP's part.



After seeing the sign off on the first page of the trading halt, I assumed there was no second page. One to remember for the future.

Centro's board of directors could never say that life is booring.


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## oldblue (25 March 2011)

Answer from CNP.

"We know nothing"

http://asx.com.au/asxpdf/20110325/pdf/41xnhw48v8gql7.pdf


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## oldblue (31 March 2011)

Brian Frith of The Australian isn't too optimistic about CNP. For good reason, IMO.

http://www.theaustralian.com.au/bus...tail-from-centro/story-e6frg9if-1226031007993


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## nulla nulla (31 March 2011)

Good article. A significant point made in the article is that the alleged negative Net Tangible asset value per share was calculated at the nadir of  the market during the global financial crisis and that American Commercial properties have recovered close to 60% of their value since then. You only have to look at Dexus and GPT to see that U.S. commercial properties are now being unloaded at more favourable prices.
Amazing how the executives and directors continue to get well paid while they concoct strategies to restructure the company at the expense of the shareholders.


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## tryin hard (8 July 2011)

This was an intresting one today. A little pumping and dumping I assume.


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## nulla nulla (8 July 2011)

tryin hard said:


> This was an intresting one today. A little pumping and dumping I assume.




Volume was up too. Do you think someone might know something?


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## tronic72 (7 November 2011)

Anyone else have an interest in Centro? Hard to believe it but CNP is almost debt-free with 4.4 billion in assets.

T


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## AngusSmart (7 November 2011)

tronic72 said:


> Anyone else have an interest in Centro? Hard to believe it but CNP is almost debt-free with 4.4 billion in assets.
> 
> T






Errrr. you thinking about the right company buddy?


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## tronic72 (7 November 2011)

AngusSmart said:


> Errrr. you thinking about the right company buddy?




I think so lol. I was suprised!

http://www.smh.com.au/business/takeover-alert-on-centro-20111106-1n1vb.html


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## oldblue (8 November 2011)

If, indeed, the new-look, restructured, merged Centro entity does emerge from this process virtually debt-free, it will only be because the lenders have converted their loans to equity and that the former equity holders of CNP have been diluted, practically to extinction.
A better solution than total collapse, but only just, I reckon!


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## AngusSmart (8 November 2011)

tronic72 said:


> I think so lol. I was suprised!
> 
> http://www.smh.com.au/business/takeover-alert-on-centro-20111106-1n1vb.html




if you like a gamble give it a shot, but i wouldnt hold your breath..


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## oldblue (17 November 2011)

Here's dose of realism from Stephen Bartholomeusz:

"Centro prepares for the plungeStephen Bartholomeusz

Published 12:55 PM, 14 Nov 2011 Last update 10:15 AM, 15 Nov 2011 


--------------------------------------------------------------------------------
inShare


When Robert Tsenin said at the weekend that if the proposed reconstruction of the Centro property group were voted down next week it might be necessary to import receivers, he may have been exaggerating. Or maybe not. 

There is no doubt that if the various security holders in Centro Properties and Centro Retail vote down the proposed aggregation of their groups tomorrow week that, as Tsenin told Alan Kohler on the ABC’s Inside Business program yesterday, chaos would be unleashed.



Centro Properties would probably be plunged into insolvency almost immediately and, with a $1.6 billion deficiency in net assets, would be in the hands of its secured lenders. No one else could expect to get a cent. 

Centro Retail security holders wouldn’t be quite as immediately and destructively impacted, given that their entity has positive net assets of close to $1 billion. 

However, given that Centro Properties owns a majority of its securities, is its responsible entity, provides its management and, with its funds, co-owns most of the properties in which Centro Retail has an interest, CER interest holders would be adversely impacted. 

Moreover, CER’s lenders have put in place relatively short-term funding to enable the aggregation to proceed. That funding matures in the third quarter of next year. If the aggregation proposal were voted down it is quite conceivable that CER, too, would ultimately end up in the hands of its secured lenders. 

Between the two extreme outcomes that could occur next week – approval at both levels for the proposal or rejection at both levels – there is a third possibility. It is possible that CER security holders approve the proposal but CNP’s stakeholders vote it down. 

That’s not necessarily a disaster for the scheme. CNP would be in voluntary administration, its secured lenders would be in the driver’s seat and they could push ahead with the aggregation. 

While it might appear obvious that the proposal – which provides $100 million to be shared by CNP’s security holders, its hybrids and its class action litigants – is better than an alternative in which they would get nothing, there is no certainty that CNP’s stakeholders will approve the aggregation. Nor is it certain that CER’s security holders will endorse it. 

In CNP there are holders of hybrids that are trying to use their ability to jeopardise the deal as leverage for something better. In CER there are a number of US hedge funds that think the scheme is too generous to CNP. 

To some extent this was predictable and predicted. In every complex reconstruction opportunistic players converge and try to use their ability to threaten the outcome to get a better deal. There’s inevitably a game of brinkmanship to be played out by the hedge funds and those trying to implement the proposal. 

Having spent the best part of a year on the aggregation, having analysed exhaustively their options, having come up with a scheme which at its core is based on net asset values and the share of them attributable to the various interest parties, and with only a week to go before the votes, it is unlikely that the directors of the two Centro entities are going to blink at the eleventh hour. 

They do have their own leverage. If the proposal is voted down, chaos will prevail and whether or not Centro Retail follows CNP quickly into administration it will be caught up in one of the largest, messiest, most complex and protracted insolvencies ever experienced in this market. 

The co-mingling of ownership and management of the underlying assets would create a nightmare for administrators and CER directors and have major and unpleasant implications for the Australian retail property sector generally. 

It is inconceivable that they could produce a better value outcome for anyone than the creation of a new, conventional A-REIT, conventionally-geared and owning $4.4 billion of high-quality Australian retail property centre assets with development upside. 

Tuesday week, CER security holders will vote first. If they approve the aggregation there will still be some prospect of it proceeding regardless of what happens at the CNP meeting. 

If they vote it down, regardless of whether it creates a need to import insolvency practitioners or not, Tsenin is right. The biggest winners will be receivers and lawyers and there will be "vast destruction" of value for everyone else. "


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## knight0819 (14 January 2012)

I just received a dividend 5 cents from CNP but wondering i bought it@0.04 for 20000shares Now what is price for my CNP share. anybody can advise?


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## nulla nulla (14 January 2012)

knight0819 said:


> I just received a dividend 5 cents from CNP but wondering i bought it@0.04 for 20000shares Now what is price for my CNP share. anybody can advise?




I think you may find that the funds you have received are for the sale of your shares into the restructure of centro and you shares are now gone.


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## knight0819 (16 January 2012)

nulla nulla said:


> I think you may find that the funds you have received are for the sale of your shares into the restructure of centro and you shares are now gone.




oops, My share gone?sad to hear that...


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