CNP - Centro Properties Group

[tigerboi]

Re: CNP-TOTAL $17B WORTH OF DEBT

What dont people understand about CNP?it has a total of $17b worth of debt...what are their assets REALLY worth?remember this.their valuations were done by cnp managers...

i believe their value when they bought the us fund was $25b,that would be worth?less than 1/2 at least...lets say $10b of assets at current prices...guess what trendsetters they still owe $17b worth of kanga/coin...
9 months ago i said this was a dead duck...tb

cnp got caught in the pyramid of pain(suckers) its that simple...rufrano sold them a dud(he got paid)...

 

[$$Punt$$]

I am a short term trader. My view is that it will secure an extension to December 2008 as it is only for another 3 months extension. I think the banks will allow that to happen and decide the main task of whether to renew further extension come December. My strategy is to sell when the announcement is made. DYOR. For long term investors, you guess is as good as mine with very high risk, very high return. Good luck guys.

 

[tigerboi]

Re: CNP-next trading halt could be its last

Short term trading being the key word there for sure,i dont think the banks will extend beyond the last deadline,i reckon they are toast & the next trading halt will be its last as futher bank losses will happen...tb

 

[Glen48]

MY guess is as the retail sections slows down due to the recession USA and here centre owners will be bailing out and rents will fall back thereby giving Centro less income???

 

[tch]

Hmm,seems to be a lot of people buying up today. Dropped a bit initally and now it's up on y'day's price. Changed by apx 36% up to 9.8c. Hope we've seen the worst of it in recent days!

 

[vida]

This is what I'm arguing - although I'm not sure I'd be quite so antagonistic.

I'm still shopping at Centro Bankstown. I drive past Centro Roselands on the way to work. Heck, on my way to Newport the other day, I saw a sign to Centro Warriewood. The physical assets are still there, and the shops are still full of people paying rent. That part of the model is good, they have their shops, and they are full.

The question is - how much STOCKHOLDER equity is still there? Say for every $1 raised using shares, they borrowed $9. Let's make it a theoretical $100m and $900m for $1b (Totally theoretical)

If they bought $1b worth of shopping centres, and the price of the physical real estate fell to $800m, then stockholder equity is wiped out, and they are in negative equity - hence why banks might want the money back, and shares go to a few cents each.

But if the rent is enough to service the debt, and investors believe that in a few years, the real estate would go to 2 Billion, the company does not need to be wound up - in fact, with a long term view, it would be massively under priced.

Once again, let me clarify. I am not offering or seeking advice. I am provoking debate and asking for people to poke holes in my "ifs and buts".

Sunder: yes it doesn't look too bad when you put it like that. There is a lot of debt but it isn't all due now, 76% leverage altogether so they are solvent and income earning and paying the debt costs. In the future the market will improve and the banks will get their money back plus all the interest earned in the meantime. The issue is whether the banks can afford to wait, their balance sheet is deteriorating but then again to add more losses to it via CNP is not going to help the banks either at the moment. Their position is risky2.

I personally think that there is a good case for the lenders to keep CNP going for a lot longer

 

[blogs]

Vida, you must be happy with todays movement-well done. Not sure why you took aim at me-maybe just the stress of the day... Anyway heres to playing the ball and not the man and hoping to see CNP on the up, on such a terrible day its nice to see some green.....

 

[hsv2001]

hey here is a report i though was interesting, seems a report had hinted by the banks to centro to reject the offer of the US sale as it was too much under the asking price for the centres. Perhaps this means that the possible extension may have already been hinted ?????

Source - http://www.businessspectator.com.au...efy-gloomy-market-JJ87B?OpenDocument&src=srch

"Centro shares surge 33% defying market gloom

By a staff reporter

Centro Properties Group Ltd shares have bucked the trend on a gloomy market, jumping as high as 33.33 per cent, a day after the troubled property investor said a planned $US714 million ($A880 million) sale of some of its US shopping centres had fallen through.

Centro shares were trading at 9.3 cents, up 29.16 per cent, at 1524 AEST, having reached a high of 9.5 cents.

The surge reversed the record 31.4 per cent slump experienced by the company on Monday, when its shares fell as low as 7.2 cents.

Centro said on Monday it had failed to close a deal to sell 29 US malls, a fortnight ahead of a critical deadline with its lenders for the refinancing of the company's debt.

But the company said talks with the purchaser were continuing, although there was no assurance the discussions would lead to a further agreement on a sale.

Separately, a report in The Australian said Centro had received support from banks to reject the offer, well below the original asking price.

According to the report, this may be a positive signal for Centro as it struggles to meet a critical September 30 bank refinancing deadline.

The company has already received several repayment extensions from its lenders.

Centro shares closed up 22.22 per cent to 8.8 cents."

Marc

 

[vida]

HSV 2001: that article is days old now and it was already posted on this thread days ago when it was first released to the press. Yeah its common knowledge I think now that the banks support CNP decision not to sell.

 

[vida]

Analysts expect Centro extension

As vital to the system as AIG.

Natalie Craig and Eli Greenblat
September 18, 2008

SHOPPING centre owner Centro, like the government bailed out American insurance giant AIG, is almost too big to be allowed to fail, despite its ongoing inability to pay down maturing debt.

Analysts say that the collapse of a crucial deal to sell American shopping centre assets is unlikely to extinguish its chances of an extension on $1.2 billion in loans to US noteholders maturing on September 30.

They say the last thing Centro's financiers want is to become owners of shopping centres via a complicated web of syndicates and funds. Especially when those shopping centres, both here and in the US, are proving hard to sell.

Talk among the insolvency industry is that tens of millions of dollars in fees would be ripped out of a Centro collapse, making its decaying corpse the biggest game in town for corporate undertakers.

Only the biggest insolvency firms in Australia would have the resources and skill to handle a Centro administration. The administrator would be appointed by Centro directors with advice from their lawyers as well as input from leading creditors.

Centro continues to bleed cash and test the patience of its backers. Centro reported negative cash flow of $148.3 million for six months to June 30; with restructuring costs of about $60 million; interest losses of $92.9 million and derivatives losses of $84.2 million.

Winston Sammut, investment director of Maxim Asset Management, said banks and financiers were "probably leaning towards an extension".

"What Centro has basically got going for it is time ”” I think if they can get an extension they will survive," Mr Sammut said. "If Centro goes into administration, its lenders will be in the same position that Centro is at the moment ”” with assets to sell but no buyers, or buyers at very low prices."

Centro would also owe Australian lenders and US private placement noteholders about $2.75 billion by December 15. But Australian and US noteholders must be satisfied by September 30 that Centro is successful implementing the plan it outlined in February.

Mr Sammut said Centro had failed to reassure its lenders.

"The issue for Centro is that they should be showing their lenders that they're making progress in terms of selling down some assets. Unfortunately that hasn't been the case."

It was revealed on Monday that a deal to sell Centro's stake in its American shopping centres had fallen through.

The sale of Centro's interest in the Centro America Fund was a key to its strategic plan.

It has also had limited success selling shopping centres in its Centro Australia Wholesale Fund, which has stakes in 25 Australian shopping centres.

The only possible success is the conditional sale of an Adelaide car park, on behalf of one of its syndicates, for $47.7 million.

It told investors last week it had been unable to find a buyer for the $300 million Centro Bankstown shopping centre in western Sydney. The sale of Centro Southport in Queensland for an estimated $75 million has also fallen through.

A spokesman for Centro said these were "significant one-offs" that were pulling down cash flows and that "but for those one-offs we are more than covering the interest".

Mark Wist, director of property ratings agency PIR, said there was "considerable nervousness" surrounding Centro's ability to sell its assets following the collapse of the CAF deal.

He said if Centro collapsed the reputation of Australian REITs overseas could be "impaired".

http://www.centro.com.au

 

[hsv2001]

That report hasn't seemed to have much affect on the sp. but AIG fell $1.70 yesterday after being saved by the government, I honestly thought that the share price would stay steady or begin to rise. However in saying that the US market took a huge fall yesterday but to drop from $3.75 to $2.05 is crazy. If this happened to Centro would centro then fall further down?

 

[foxyshres]

First round of sales in & not an enormous discount on book value. LONG overdue! Heres hoping theres a swing upward

 

[$$Punt$$]

Warning to ALL

I think there are hedgefunds pushing the SP down after closing by 1.8 cents down to 6 cents. Beware, there are plenty punters selling down stock first and buy later at lower price to make a profit. As a result, thank god I sold all my shares when the announcement was made.

 

[sonicwind]

What happened here I put a BUY order in at 0.072 this morning and came back from work to realise the order was executed at 0.06! Doesn't look good here, I think either someone from a hedge fund had punched in a large sell order at the wrong value very late in the afternoon, or Centro is about to collapse??

 

[vida]

sonicwind, that is funny your comment that centro may be about to collapse. It collapsed last year but that does not mean it can't revive and get back on track somehow.. it is already collapsed but can be straightened out and I think for all intents and purposes its lenders and management will see to it

The SP is very volatile and will be for a while but after the announcement is made that long term extension has been granted the SP should stay volatile but at higher levels. I am of two minds about buying more at these levels, I could but I need to keep some money in the bank and I don't want to get too greedy. I will be happy with recovery of the share value to reasonable levels and I am not out to reap a fortune, just some stability and recovery..

 

[sonicwind]

Vida, you were referring to the SP collapse, I was fearing a company collapse.

Even if the SP on Friday retreated very quickly, a BUY order at 0.072 should have been executed at 0.072. But my order was executed at 0.06, that is a verticle 20% drop! My understanding is the only way this could have happened is if someone had put in an extremely large SELL order at 0.06 so that any BUY order above 0.06 was executed at this price. Am I right?

My questions is then why would anyone want to sell for 0.06 when there were buyers wanting to pay a higher price?

Maybe they have some bad news that no one else knows about and wanted to dump their shares at whatever cost?

I just want to share my concerns with you guys as I fear the SP on monday may fall to unprecedented level, although I could be completely wrong. Fingers crossed for anyone who is stilling holding CNP.

Also I have not been able to view www.centro.com.au since friday afternoon.

 

[sanj]

The price only dropped like that at the end of the day during the auction period. Someone was happy to clear of 3 million shares at 3c , 3.5c and 4c. In my opinion I smell a short seller....there are several articles which quote the CEO of Centro giving relatively clear opinions that a extension past 30 sep well be given. This view was also supported by an analyst. Assuming nothing out of the ordinary occurs Monday(bad news) I will double up my holdings.

I don’t think conditions are going to settle down anytime soon for CNP in terms of volatility until a solid plan is initiated. They would need to announce finance extensions past DEC15 for stability i.e 2 year extensions etc and some good asset sales close to book value like the ones the other day.

DYOR

 

[nioka]

What happened here I put a BUY order in at 0.072 this morning and came back from work to realise the order was executed at 0.06! Doesn't look good here, I think either someone from a hedge fund had punched in a large sell order at the wrong value very late in the afternoon, or Centro is about to collapse??

You were probably lucky to get the price of 6c. At the close of trading there were millions of shares listed at 6c as "Portfolio special crossing". That could mean lots of things but is probably transfers between funds where the price is governed more by the value of making the transfer than by the actual value of the shares. Actual ownership or control may have changed little.
Monday will be a new day. You probably will be able to sell again at a profit. CNP is now a spec stock with great gains possible but with some risk. DYOR

 

[tulasi74]

Re: Warning to ALL

I think there are hedgefunds pushing the SP down after closing by 1.8 cents down to 6 cents. Beware, there are plenty punters selling down stock first and buy later at lower price to make a profit. As a result, thank god I sold all my shares when the announcement was made.

You are doing well being a short term trader buying and selling for quick profit. I just hope that you don't find yourself on the wrong side of an announcement.

My personal belief is that hedge funds would not be interested on a penny dreadful which is what Centro is now. But I do believe that it is in the interest of banks that are considering doing a equity for debt swap at current market prices to push the price down. If that happens, it will dilute existing shareholders to oblivion. But Centro CEO can call the banks bluff and let them appoint an administrator as the cost of an administrator plus discount on forced sales plus lost revenue from management contracts that will be voided by such an action might well and truly exceed banks paying even a 500% premium to current share price of 6 cents.

I personally don't think proper valuations can be given for Centro's properties given current market conditions. Despite this, I think its well known that property values in Aust has not fallen more than the US. Centro have already written down the value of the real estate.

If Centro are still left with net tangible assets of 69 cents after these writedowns, its quite feasible that they should be able to negotiate a equity for debt swap at a 20 - 40% discount to current valuations even if that value cannot be obtained even if a sale is required to be realised now. A 40% discount to net tangible assets of 69 cents means shares could potentially be issued at 40 - 50 cent per share.

An article in the Herald Sun today makes a very good point that the current market turmoil could be a benefit for Centro rather than a disadvantage as the worsening credit conditions makes it even more difficult for asset sales and appointing an administrator to wind up Centro could take too long and prove very very costly. It makes more sense for the banks to give Centro a very long extension and take up the equity for debt option and that way take part in any rise in property values.

I think they will be ok. I missed the 6 cents but I am considering adding more at these prices.

This is just my view. Please DYOR.

 

[vida]

DDay is looming again. To extend or not to extend. I have already philosophically kissed all my money goodbye in not having sold on the way down to this low SP where even now i could get some of it back, just in case it does get bank support and survives.

The news is not good today - the journalists again are predicting the axe will fall in light of global financial disaster worsening. However this may just emphasise to the lenders that they will be even further worse off by pulling the plug on the company at this time. What will they gain by that?

I have no idea what will happen on Tuesday. I believe this is the cut off date : we can only wait and see. Depending on the announcement the SP will either spike or the company will be suspended from trading indefinitely

Its getting to feel very much like roulette or the pokies, all or nothing GOSH

I am looking now at WOW and TLS and ANZ as investment vehicles for 2009