CNP - Centro Properties Group

"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.

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.

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.

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?

sanj said:

Will this have much of a impact on the price Monday morning....Any ideas?

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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

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

cheers,

yang

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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.

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.

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?

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?

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Don't understand why there is still no announcement/ updates by CNP despite earlier promise. Make investor lose faith in CNP.

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.

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.

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.

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?

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?

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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.

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..

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

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

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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.

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.

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

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???