CNP - Centro Properties Group
- Thread starter traderandy
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Next thur10th or fri11th/july should sum up the real centro situation and put an end to speculation with the first round of bids on CAWF properties due..many bids, sp. should go up...little to no bids, sp. will almost certainly go down, probably alot further than today...(this is if centro release info or if info is leaked).There is of course the other iron in the fire,and thats the CAF,but with no update on the '30day decision' one can only assume that that sale has fallen through...i hope i'm wrong...
today's article does damage centro's position in trying to sell assets at bv. surely they'll do something about this..
today's article does damage centro's position in trying to sell assets at bv. surely they'll do something about this..
Am glad to hear somone complained about that wildly unsubstantiated piece. I would if I had the energy, I just think its just totally disreputable and purely personal conjecture that I can't be bothered giving the guy any credence with a response. I think best to ignore him at least for me it feels that way, but if people do want to contact him and his newspaper that is all the better.
Wow $$Punt$$ I am impressed you bought more today. If you make a zillion on this stock I would like to catch up with you for a drink , your shout ? or maybe it should be my shout to congratulate you. Anyway if you do well then so do i but not as well as you. Hopefully you live in Melbourne and we can clink glasses on it one day .... otherwise commiserations deserve a clink as well
Wow $$Punt$$ I am impressed you bought more today. If you make a zillion on this stock I would like to catch up with you for a drink , your shout ? or maybe it should be my shout to congratulate you. Anyway if you do well then so do i but not as well as you. Hopefully you live in Melbourne and we can clink glasses on it one day .... otherwise commiserations deserve a clink as well
There is no good press today on CNP or anything. I have not bought any more and was going to but I think I'd better not, the CNP shares I have already are enough risk. If they do well, then I will be happy enough as it is, if not then I don't want to compound the loss. So I will hold but not buy I think for the time being. My income from now on will be strictly savings and no more investments in market or anywhere else for that matter. It is all too hard at the moment and I just want to get on with life and enjoy not stress.
The temptation is there to average down, but I too have decided what i'm prepared to risk and am opting for more secure places to park the rest of my money =P
One day we'll be kicking ourselves for not putting more into Centro when it was only 22c =P
One day we'll be kicking ourselves for not putting more into Centro when it was only 22c =P
Hartley, you are right: there are more secure places to park our money and in in these times we need that. In this market there are lots of alternative opportunities. CNP offers more quick short term reward for the high risk we may presently agree to, while other stocks may be just as rewarding in longer term but at lower risk and that is really preferable I think. As far as I am concerned the bank savings account is suddenly looking very attractive and comfy. I have not been investing new income into the market recently, my savings are growing and I quite like that. Much nicer than seeing the market constantly devaluing my hopeful investments of recent & past years. Oh well I am quite sure there will be a turnaround in 2009 and things will start picking up and in meantime we have a great buying opportunity market if we choose carefully. I am going to take my time and watch and wait. I may even invest a bit more in CNP yet depending on how their selling of assets goes. Yes 22c does seem like a great SP for buying more and one day we may rue the lost opportunity, but as long as we don't lose what we have invested in CNP and it turns into a profit then we should just be happy ...
Where is everyone? Has everyone sold out and given up? No comments for awhile here, but I guess there is nothing announced no media updates so until then we all just sit and wait..? Is anyone concerned the market is crashing - apparently its a once in a hundred years event what we are now experiencing in the global economy. Is there a recovery looming? Warren Buffet is still buying, says this reversal is the nature of capitalism and the US economy will get back on track eventually and trend upwards again and its the best buying opportunity if one buys value stocks of course. How can CNP cope in this climate of doom even if it is temporary? when will we know..?
I don't have any answers, vida, but if this is a "once in a hundred years event" then it won't be over this year, or probably next!
I'm optimistic that it's a nasty bear market cycle that will play itself out over time as W B suggests.
Disc: Small CNP holding.
I'm optimistic that it's a nasty bear market cycle that will play itself out over time as W B suggests.
Disc: Small CNP holding.
Still here Vida....just holding my breath. Marketwide issues aside, I expect August to be a month of illumination as sales and their relative success in terms of values start to be announced.
CFS Retail eyes $300m Galleria in Perth
http://www.theaustralian.news.com.au/story/0,,24013695-643,00.html?from=public_rss
CFS Retail eyes $300m Galleria in Perth
http://www.theaustralian.news.com.au/story/0,,24013695-643,00.html?from=public_rss
looks like a good day today, some sales have been confirmed for their USA properties. i recomend having a look but im not to sure if this will be a daily run or might actually help them get out of trouble, one would have to imagine that it might help get more bank extensions though
Fuming annoyed with optus network.....Found out the ann at around 12.30pm due to internet accessibility, by then share has dropped 4.5cents off the peak. Make a small profit by selling 200000 at 27 cents but still holding some. What a day!!!
P/S Vida.....I lived in Brisbane and can shout you a drink or two when SP reached 50cents...good luck
P/S Vida.....I lived in Brisbane and can shout you a drink or two when SP reached 50cents...good luck
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From SMH.com today...
"it has a 47% stake in the fund that is selling the shopping Centres, Centro America Fund (CAF), and its 50% owned Direct Property Fund International owns another 48%.
Net proceeds will be $340 million after payment of the secured debt, and Centro will receive about $290 million of that, and use it to pay down its own debt.
All up, Centro's banks and US noteholders are owed about $3.6 billion, so there is still a long way to go.
But it's a start."
"it has a 47% stake in the fund that is selling the shopping Centres, Centro America Fund (CAF), and its 50% owned Direct Property Fund International owns another 48%.
Net proceeds will be $340 million after payment of the secured debt, and Centro will receive about $290 million of that, and use it to pay down its own debt.
All up, Centro's banks and US noteholders are owed about $3.6 billion, so there is still a long way to go.
But it's a start."
I think a sale at 10% below book value is an excellent result for American based centres. The looming recession in the US and subprime has assured their would be few big players willing to fork out 714m in the current climate.
I would expect to see better results for the Australian assets as our economic climate is in better shape then the US.
I would expect to see better results for the Australian assets as our economic climate is in better shape then the US.
Good to hear you made a profit $punt$, congrats. I didn't do anything lately with CNP, just holding holding holding my small holding but its lot of $$ to me.
If the assets are being sold just 10% off book value that sounds ok to me, much better than 50% off book value .. gosh !! that's an ok discount in these troubled times I would think. Its not a fire sale. Once the sale is confirmed and contracts drawn and signed then I think the SP may even get to .50c +
Its hard to believe it was up there not too many weeks ago, how things can change so fast .. this really deserves to be a better stock than .27 cents etc.
That's what the banks wanted and this is what they are getting: asset sales! so I think that when we get to December and banks re-evaluate the debt they will more easily extend further if required with improvement in debt levels
If the assets are being sold just 10% off book value that sounds ok to me, much better than 50% off book value .. gosh !! that's an ok discount in these troubled times I would think. Its not a fire sale. Once the sale is confirmed and contracts drawn and signed then I think the SP may even get to .50c +
Its hard to believe it was up there not too many weeks ago, how things can change so fast .. this really deserves to be a better stock than .27 cents etc.
That's what the banks wanted and this is what they are getting: asset sales! so I think that when we get to December and banks re-evaluate the debt they will more easily extend further if required with improvement in debt levels
An analysis of the recent sale announcement.
http://www.businessspectator.com.au/bs.nsf/Article/Centro-GLREC
http://www.businessspectator.com.au/bs.nsf/Article/Centro-GLREC
Hi everyone
The CAF announcement is an excellent result as its only a 10% discount. The 10% discount equates to a little over 79 million. They have retained management rights. From what I have read, CNP will get around $250 million from the 714 million. If they also sell the 1.3 billion portfolio of Aus properties and retain management rights, and CNP gets 650 million to pay off debt, they reduce their total indebtedness by 900 million. The debt that matured on 15 February 2008 and the relevant interest rates are as follows: (9.1 mln - 6.61%, 61.8 mln - 5.73%, 1340 mln - 8.30%, 1358mln - 5.93%). It will be better for Centro if they are allowed to pay off debt with higher costs attached to it but that would depend on arrangement with banks. At an average interest rate of 6.61%, reduction of debt by 900 million will reduce financing cost by 61 million a year. The February 2008 result excluding writedowns, was a loss of 50 million for 6 months. This would not have factored in the higher cost of finance on most of the debt which only came into effect in December 2007. So Centro is a long way away from being a profitable entity even through these asset sales. If you add to this higher adviser fees, litigation costs, higher costs associated just with on-going negotiations, it will be several years before shareholders can expect anything by way of distributions.
At last result they had net tangible assets of $1.35 per share. I read something that said 60% of their assets are in the US and 40% in Australia. On this basis, the US contribution to net assets is 81 cents and Aus contribution is 54 cents. Lets assume US assets will see a further reduction in asset values by 20% and Aus by 10%. This will reduce net tangible assets to $1.13. The damages claim made by shareholders taking litigation action is 700 million. This equates to roughly 90 cents per each Centro share outstanding. Taking 90 cents away from discounted $1.13 gives 23 cents per share which is where the share is trading at the moment.
There are possibilities for spikes in share price to 40 - 70 cent range on asset sales news, or settlement on shareholder claims. It could be higher if there is talk about takeover. But those who are holding out for a higher price should be prepared to wait 2 - 5 years and that will depend on the future of the credit markets and banks. I read an earlier post that talked about what is happening as a once in a 100 year event. If that bears out, I hate to think what the future is for Centro.
I have reduced my expectations significantly and I will be selling some of my holdings at 48 cents as I feel that there are better trading opportunities elsewhere using margin loan. This is just my opinion and please DYOR before making investment decisions for yourself.
Tulasi
The CAF announcement is an excellent result as its only a 10% discount. The 10% discount equates to a little over 79 million. They have retained management rights. From what I have read, CNP will get around $250 million from the 714 million. If they also sell the 1.3 billion portfolio of Aus properties and retain management rights, and CNP gets 650 million to pay off debt, they reduce their total indebtedness by 900 million. The debt that matured on 15 February 2008 and the relevant interest rates are as follows: (9.1 mln - 6.61%, 61.8 mln - 5.73%, 1340 mln - 8.30%, 1358mln - 5.93%). It will be better for Centro if they are allowed to pay off debt with higher costs attached to it but that would depend on arrangement with banks. At an average interest rate of 6.61%, reduction of debt by 900 million will reduce financing cost by 61 million a year. The February 2008 result excluding writedowns, was a loss of 50 million for 6 months. This would not have factored in the higher cost of finance on most of the debt which only came into effect in December 2007. So Centro is a long way away from being a profitable entity even through these asset sales. If you add to this higher adviser fees, litigation costs, higher costs associated just with on-going negotiations, it will be several years before shareholders can expect anything by way of distributions.
At last result they had net tangible assets of $1.35 per share. I read something that said 60% of their assets are in the US and 40% in Australia. On this basis, the US contribution to net assets is 81 cents and Aus contribution is 54 cents. Lets assume US assets will see a further reduction in asset values by 20% and Aus by 10%. This will reduce net tangible assets to $1.13. The damages claim made by shareholders taking litigation action is 700 million. This equates to roughly 90 cents per each Centro share outstanding. Taking 90 cents away from discounted $1.13 gives 23 cents per share which is where the share is trading at the moment.
There are possibilities for spikes in share price to 40 - 70 cent range on asset sales news, or settlement on shareholder claims. It could be higher if there is talk about takeover. But those who are holding out for a higher price should be prepared to wait 2 - 5 years and that will depend on the future of the credit markets and banks. I read an earlier post that talked about what is happening as a once in a 100 year event. If that bears out, I hate to think what the future is for Centro.
I have reduced my expectations significantly and I will be selling some of my holdings at 48 cents as I feel that there are better trading opportunities elsewhere using margin loan. This is just my opinion and please DYOR before making investment decisions for yourself.
Tulasi
Tulasi,
I don't believe it's as simple as that...what about fees generated from services business? ...and distributions not paid out in the past and future,where does this go?..and gross rental income % increase?..and alot of others factors?
Anyone can play with mirrors and make any company in this climate look like a basket case...the press are doing a good job of that...
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Agree with Gensis. Although Centro isn't a "Happy Little Organisation" at present, valuation solely on Net Book Value of Assets and expected outflows misses one key valuation methodology...present value of future cash flows.
That said, I think that resolution of the Court Action and further asset sales will then generate interest in the business to convince the market to start valuing some "going concern" value in Centro.
I disclose holdings in CNP.
That said, I think that resolution of the Court Action and further asset sales will then generate interest in the business to convince the market to start valuing some "going concern" value in Centro.
I disclose holdings in CNP.
The total Litigation was 700 Mil however even if they(CENTRO) did lose the lititgation it is extremely unlikely they would be required to pay the full amount. I think this could be the major issue with your valuation.I think while I agree its not always good to value A company with the best figures possible its extemely pesimistic to use figures that use a worst case situation. Also once again the value of the service business needs to be factored in. I think 75c of which alot of brokers are quoting isn't far from right.
