CNP - Centro Properties Group

[Lucky_Country]

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.

 

[metric]

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.

 

[vida]

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.

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.

 

[JTLP]

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

 

[vida]

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!!!!!

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

 

[JTLP]

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

 

[metric]

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.

 

[propergeez]

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!)

 

[metric]

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

 

[vida]

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

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.

 

[moneymajix]

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.

 

[vida]

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.

 

[Trojax]

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.

 

[oldblue]

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!

 

[Trojax]

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.

 

[Trader52]

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.

 

[vida]

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.

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.

 

[oldblue]

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.

 

[ghostworld]

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]

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.