CNP - Centro Properties Group

MR_B said:

So any expectations from someone good with numbers in the weeks to come? I hold, I would kick myself more for missing out more then for losing what I have in there currently. Come on CNP.

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I can't see any change until there is a breakthrough with either the banks or some new equity funding. The value has been established for the share price through consistant volume trading at current levels. Any new equity funding will be based on this price and probably at a discount. I hope for your sake and for the sake of others that I am wrong but I think the shares could trade as low as 10c to 12c within the next month. DYOR please.

nioka said:

I can't see any change until there is a breakthrough with either the banks or some new equity funding. The value has been established for the share price through consistant volume trading at current levels. Any new equity funding will be based on this price and probably at a discount. I hope for your sake and for the sake of others that I am wrong but I think the shares could trade as low as 10c to 12c within the next month. DYOR please.

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I guess anything is possible. I studied the financials from the last report and at an operating level, things look more promising than I expected. Taking out all the non cash expenses in their 2.0 billion loss, I actually got a loss of 85 million for the financial year. This included 70 million of adviser fees. These adviser fees could potentially be reduced if a longer term extension is given and there is no immediate need to sell assets.

Their net tangible assets per share did reduce from $1.35 per share to $0.69 per share to reflect the loss in the real estate assets. I guess it wouldn't take much for the $0.69 cents to disappear. The question for the banks is whether things can get much worse from here. The $0.69 cents per share is only tangible assets. Centro's services business also has a value which also got some interest. The value quoted in media reports was $1.00 billion. That will add another $1 per share to Centro shares.

It must be remembered that at the group level Centro are about to reduce debt by 2.0 billion which will go partway to reducing finance costs. They could very well retain management rights. I doubt very much that the banks will pull the plug from under them as administrators/liquidators are very expensive and they will lose out more if they go down that path instead of giving Centro longer term extension to refinance.

Centro CEO has already said that decision on the debt extension beyond 30 September will be advised in the third or fourth week of September. I think he is quite confident of getting an extension.

As to share price, I agree that it could stay at levels below 50 cents for another 1 - 2 years even with a longer term extension. However, I don't think they are going to go under. So just like the banks, the shareholders also have the choice of holding onto their shares to avoid greater loss than would otherwise be the case.

30 million shares were traded on 28 August and volume weighted average price was around 18.5 cents. On Friday after report, it was lower volume but volume weighted average price was above 19 cents which was higher than the previous day. Even though the stock had a weak close, the overall day was quite strong compared to the previous day. I am guessing it will trade in the 15.5 cents to 21.5 cents range until the announcement and if the announcement is positive, make a break above 21.5 cents and possibly head to 45 - 70 cents and trade in that range for a while.

I have been wrong before so please do your own reseach.

Tulasi

Holding 100,000 + shares, fingers crossed on the extensions, I guess we should be hearing something before the September 30 deadline? Is the company still meeting current loan repayments? A little nervous, but 20k is recoverable in time with second job...

Mr B.. you bought 100,000 share at .20 cents ? Well I think you should do well in the near or far future with this stock although no guarantees naturally, as no one knows for sure not even Glenn Rufrano can be certain.

A lot of people bought shares at a lot higher SP and will be just hoping to get their money back one day soon, happy enough at that I would think and if there is any profit over that possible well that will be even more joyous for some.

Its all relative I think. We hope to make a good profit, but when losses are staring us in the face even if paper only we crave to get our money back and forget the profit, but of course the gain is what we were really after. Its called gambling and I know that we should not do it if we can't afford it.

Having said that I am also holding/gambling that CNP will manage to hold on to the business and if it can into 2009 then I think it will recover and we will all get our money back and a bit more, although those that bought in say a year ago at peak SP then they will have to depend on the litigation ..

Those of us who bought after the massive market discounting could do very well.. but of course nothing is certain until it is certain - wait and see & pray

Is anyone hurting as much as me?

I stupidly bought 3000 of these CNP at $1.22 (really bad choice!) and now i'm down 87%!

I just want to get back even but it seems as though that will not happen....not until maybe a VERY long time anyway

yes its hurting me a lot, admitidly i bought at 26c but i bought a fair few, iv stopped looking, they will bounce as news of sales comes through. (i hope)

I've got 25,000 CNP now average .38cents & also not liking to look. I have had a glimpse of a thought of accumulating more but my better sense tells me not to risk it. We could sell out and get over the loss but then when the announcement comes that they have a long debt extension the SP should move upwards. Its probably traders short selling the stock that is moving it so far downwards at the moment - its perfect for making money on short selling I suppose as there is no good news but nothing too bad either, nothing we don't know. The index derating of the company which was only to be expected probably brought the SP as far down as we see it today, those who can bear to look.

Yes, I've stopped looking too so please don't mention the shareprice!
I give them about a 60% chance of a successful refinancing in the next 3-4 months. Recent developments in credit markets and interest rate movements probably improve their chances marginally.

shmi said:

yes its hurting me a lot, admitidly i bought at 26c but i bought a fair few, iv stopped looking, they will bounce as news of sales comes through. (i hope)

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an article in todays AFR says they are struggling to sell their centres, Centro Bankstown has been pulled off the market through lack of competitive buyers...

That they pulled bankstown may not be encouraging but its not bad that they refuse to sell at fire sale bargain basement price. They will hang on to it until better days and its still a valuable asset - there have been a lot of sales and they don't have to sell everything. The crucial thing is refinancing and if they can swing that for the long term then all is well. The banks asked for asset sales to reduce the debt which would enable further extensions / refinancing so that is what has happened, they are surely making the effort.

white_goodman said:

an article in todays AFR says they are struggling to sell their centres, Centro Bankstown has been pulled off the market through lack of competitive buyers...

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nioka said:

I can't see any change until there is a breakthrough with either the banks or some new equity funding. The value has been established for the share price through consistant volume trading at current levels. Any new equity funding will be based on this price and probably at a discount. I hope for your sake and for the sake of others that I am wrong but I think the shares could trade as low as 10c to 12c within the next month. DYOR please.

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I posted the above on August 30th. Unfortunately for CNP holders I was right. Today sees the shares trading at 11c. Time for me to reinvest the capital held from my sale at 20c. Those that followed my suggestion at 20c will be happier than those that didn't. Will I be happy in a week or two that I chose to reenter now? DYOR

Why on earth would you enter CNP now? Might aswell take you money down the casino and pick red or black!!! Far far to much risk!!!

it would be a high risk, but you could have the chance to really make some money if the refinancing is successful! at 30 June 2008 the value of assets per share AFTER the huge write downs of centres was 69c per share, this ultimately means that the shares are currently heavily undervalued at 11c p/s and the margin is just that, the huge risk needed to potentially make lots of money.

Thats my opinion anyway.

Marc

Forget the 69 cents per share, what value a shoppingcentre if they 'have' to sell it? Something is only worth what someone will pay......

blogs said:

Why on earth would you enter CNP now? Might aswell take you money down the casino and pick red or black!!! Far far to much risk!!!

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Life itself is a risk. I took a calculated risk when I sold and it paid off. I am now taking a calculated risk based on the facts as I see them and reentering. At least I have more shares now than I had last month. I have some faith that the management are trying hard to put value back into the SP. The operating side of the business is performing as I see things. If they can get the financials right then it is on the way back. The fact that the current money situation allowed the interest rate to fall means there is a little more money around and leads me to think that refinancing is possible. Hopefolly I have bought at the bottom and that I will not get cut with the falling knife.

blogs said:

Forget the 69 cents per share, what value a shoppingcentre if they 'have' to sell it? Something is only worth what someone will pay......

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Haven't they proved that they don't HAVE to sell?. That is one of the factors that gives me some confidence.

blogs said:

Forget the 69 cents per share, what value a shoppingcentre if they 'have' to sell it? Something is only worth what someone will pay......

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That is not strictly true. An asset can be worth a lot more especially in the future than someone is willing to pay during a particular period. The situation here is that everyone, not only CNP, is having difficulty selling assets at an adequate price. This market condition will improve over time and the purpose of giving further long term debt extension is to provide CNP with time to wait till market conditions improve for further sales. Once these extensions are announced the CNP buyers of this week should be very happy. I think so anyway. We will see.

Re: CNP-dead man walking

I called this goner elsewhere 9 months ago in between the outrageous ramper(not on asf) who said it was worth $4.60,way way too muh debt should have seen the entire board sacked for gross incompetence.

CNP havent been able to pay $1.1b since december 18th when the drama started,they seek an extension on that til this december 18th...when i believe a further $3.8b is due,they cannot sell assets as any (smart) buyers are waiting for when they fold.

I cannot see how they can climb out of the doo doo,this stock is akin to backing 100/1 shots...they need a miracle which in the current market wont be happening...tb

nioka said:

Haven't they proved that they don't HAVE to sell?. That is one of the factors that gives me some confidence.

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Are you all nuts??? The have insane debt levels, are on the verge of going under, have assets that no one wants, its share price is at a all time low and you have confidence? All it takes is for the banks to say no more and she is all over red rover...

vida said:

That is not strictly true. An asset can be worth a lot more especially in the future than someone is willing to pay during a particular period. The situation here is that everyone, not only CNP, is having difficulty selling assets at an adequate price. This market condition will improve over time and the purpose of giving further long term debt extension is to provide CNP with time to wait till market conditions improve for further sales. Once these extensions are announced the CNP buyers of this week should be very happy. I think so anyway. We will see.

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Sorry Vida but is absolutely true, and the main reason so many people go broke. Try telling the people who have over paid for their houses in the States, the U.K and Europe that they are worth more than what the market values them-a market can OVER value something just as easy as you may think it can undervalue. The simple fact is a asset is only worth its realisable value, at the moment CNP shares are worth 11 cents-you couldnt go to a bank and use them as collateral saying 'but they are really worth 69 cents'.......