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Likely due to the trading halt. No closing price to display.....................................................................
CNP - Centro Properties Group
- Thread starter traderandy
- Start date
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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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 ????
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 ????
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
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
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..
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..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.
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.
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.
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.
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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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
Goto Quotes and Research then select Tools.Then select Stock Valuation Model. Enter the code CNP and it will give you the stock valuation.
Sean K
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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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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 ???
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.
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.
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.
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.
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.
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
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
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
"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
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
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
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.
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.
