CNP - Centro Properties Group
- Thread starter traderandy
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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.
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.
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
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
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.
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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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. "
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.
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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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.
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.
I think i'll wait till the asset sales are announced..today will be mixed reactions thanks to good job by hopeless journo's..
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 
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
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.
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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) "
***********************************
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) "
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.
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.
zebop
Detector
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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.
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.
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.
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.
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 >>>
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 >>>
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.
