CNP - Centro Properties Group

vishalt said:

You know what, I knew it.

Like they say, if something looks way too good, its bloody not true. I knew it, there would be something to hit the Aussie banks from sub-prime, banks around the world from even Canada and Norway have been vaporized by this, and now finally its our turn.

GO SHORT ON BANKS!

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Yes, I don't know why everyone is so positive on the financial sector...aren't they kind of at the center of all this? I know I wouldn't touch any banks, ANZ especially, ugh, price hasn't moved an inch in well over a year.

Looks like it gaped up this morning, congrats to anyone who got in yesterday, I think it will close higher today as most investors have probably bought in at bargain prices over the past few days.

I got out this morning. worried it might flop later today, yesterday close it started to drag so might get back in later.

Freeballinginawetsuit said:

I bet there are some pretty red faced insto's/fin advisors doing the ostrich to there clients now

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Only the bad ones .

We don't have any client's in centro directly and out of managed funds recommended only one has exposure to centro of 2% total portfolio. To be honest a lot of advisers don't do a lot of LPT spruking these days for income plays anyway due to westpoint etal. Yield is good, longevity is better.

vishalt said:

You know what, I knew it.

Like they say, if something looks way too good, its bloody not true. I knew it, there would be something to hit the Aussie banks from sub-prime, banks around the world from even Canada and Norway have been vaporized by this, and now finally its our turn.

GO SHORT ON BANKS!

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ANZ has a PE of 12.8 and a div yield of 5.3% fully franked. Expected earnings growth and dividend growth going forward with no direct exposure to sub prime.

I'd say it's not a bad defensive play with a strong, reliable dividend.

Wealth Wizard said:

I think it will close higher today as most investors have probably bought in at bargain prices over the past few days.

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I would have thought that would be a good reason why it will close lower - locking in profits, not higher.

the way its going at present it wil close lower then yesterday. down to 1.25 at present. should have sold at 1.45 this morning, thats what happens when ur greedy i guess.

hahahaha

I would have thought that would be a good reason why it will close lower - locking in profits, not higher.

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Yes, I guess it depends on when they got in, I was thinking todays strong open would push up bids a bit more as some investors may be thinking slightly longer term momentum and try to get into the stock today, but It seems im wrong and the portion of profit takers after the morning jump must be too strong, given the stock is worth $1-$2 its probably useless to assume short term investors would be interested, and if they are price would be more effected by arbitraguers than one off volume trades.

Fed23 said:

I got out this morning. worried it might flop later today, yesterday close it started to drag so might get back in later.

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I was out this morning too.

Saw a large sum of people and about 3Mil+ shares wanting to be sold at $1.50 and thought it would be too much to overcome, so was out at $1.45 for about a 60% gain in 2 days

Didn't put much into it though as I got burnt with AED trying the same stunt

If it can get past $1.50 where it has stopped 2 days in a row now, then perhaps it will run a little further.

Junior said:

ANZ has a PE of 12.8 and a div yield of 5.3% fully franked. Expected earnings growth and dividend growth going forward with no direct exposure to sub prime.

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ANZ is also the worst performing bank in this country of both the pillars and the regionals, and it now has exposure to Centro which is on the brink of collapsing.
[/QUOTE]

Volume

120 million mon
260 million tues
220 million wed
120 million thurs

If the banks held 92% of 845 million shares, I assume they are off loading them in an attempt to reduce theri exposure, around 1.50 is better than nothing.

I held these (small amount) but sold yesterday when it couldn't push through 1.50. Felt it was the banks trickling some of their holdings out.

With the US, EU and Swiss central banks prepared to supply 500+ billion to the financial markets, there would have to be a strong possibility Cantro will be able to get the funds albeit at a costly rate.


With some 2/3 of the total shares traded one could expect that there wouldn't be as many sellers about and the price will either hold or start moving up....

Santoro said:

Volume

120 million mon
260 million tues
220 million wed
120 million thurs

With some 2/3 of the total shares traded one could expect that there wouldn't be as many sellers about and the price will either hold or start moving up....

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With the way the price has fluxuated some of those shares would have been traded three or four times at least. A lot listed for sale now were also probably recently bought.

Well, just got out at 1.23 at an entry price of 0.61... there are too many factors weighting down this stock at the moment. The latest article about the management hiding $1 billion debt is not a positive one. Good luck to other holders.

Santoro said:

Volume

120 million mon
260 million tues
220 million wed
120 million thurs

If the banks held 92% of 845 million shares, I assume they are off loading them in an attempt to reduce theri exposure, around 1.50 is better than nothing.

I held these (small amount) but sold yesterday when it couldn't push through 1.50. Felt it was the banks trickling some of their holdings out.

With the US, EU and Swiss central banks prepared to supply 500+ billion to the financial markets, there would have to be a strong possibility Cantro will be able to get the funds albeit at a costly rate.


With some 2/3 of the total shares traded one could expect that there wouldn't be as many sellers about and the price will either hold or start moving up....

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with the current SP, it gives CNP a market cap of $1.5b. With over $5b debt to be due shortly, $1.4b due in 2mths. I think thats really pushing it, CNP will need to sell off some of its assets soon, and cheaply... I think at $1.20, it reflects the company's value correctly, too much uncertainty at the moment, so I dont see any value in it at all.

Centro Existing CMBS Facilities Update
Centro Properties Group ("Centro" or the "Group") makes the following comments about its
two commercial mortgage backed securities ("CMBS") transactions, Centro Capital Series 2
and Centro Shopping Centre Securities 2006-1, which involve various Centro managed
funds:
Solid Collateral Performance
• As at 30 June 2007, the value of the collateral in Centro Capital Series 2 has increased
by A$102.2 million (16.2%) since the date of the last "Tap" issuance in June 2006. The
Net Operating Income (“NOI”) Growth and Moving Annual Turnover ("MAT") for the
same collateral have increased by 11.4% and 4.6%, respectively, over the same period.
• As at 30 June 2007, the value of the collateral in Centro Shopping Centre Securities
2006-1 has increased by A$202.7 million (12.1%) since the date of issuance in
December 2006. The NOI and MAT for the same collateral has also increased by 2.6%
and 12.0%, respectively, over the same period to 30 June 2007.
Improved Loan to Value Ratios ("LVR") and Interest Coverage Ratios ("ICR")
The LVRs for both transactions have improved consistent with the performance of the
collateral properties.
• The LVR for Centro Capital Series 2 has improved from 48.3% to 41.6% for the
period June 2006 to June 2007;
• The LVR for Centro Shopping Centre Securities 2006-1 has improved from an
average of 53.9% to 44.2% in the period December 2006 to June 2007;
• The average ICRs for Centro Capital Series 2 and Centro Shopping Centre
Securities 2006–1, on a hedged basis, are 2.16 and 1.95 times, respectively (based
on July 2007 NOIs); and,
• On an unhedged basis the current ICR, based on June 2007 NOIs, for Centro
Capital Series 2 is 1.75 times and 1.54 times for Centro Shopping Centre Securities
2006-1 (based on June 2007 NOIs).
Funds Fully Compliant with Transaction Covenants
Centro has advised that neither it nor its managed funds are in breach of any lending
covenants. This includes both Centro’s CMBS transactions referred to above.
Minimal Increase in CMBS-secured Debt
Since the date of the Centro Capital Series 2 "Tap" issue in June 2006 and the CSC 2006-1
issuance in December 2006, the only increase in debt secured against the collateral has
been a A$21.25m subordinated facility provided to CMCS 25. The increase is less than a
1% increase in total debt for the transaction and is compliant with the transaction’s Permitted
Indebtedness covenants.
Centro has reiterated that it is not under any obligation to sell assets and would only do so
selectively if necessary. The Group is not obliged to take any specific course of action over
the next eight weeks. What is required is the development of a strategic plan or road map to
successfully operate the Group on an ongoing basis.
ASX/MEDIA RELEASE
-2-
Centro Properties Group specialises in the ownership, management and development of
shopping centres.
Please visit www.centro.com.au for more information.

sounds like a pretty confident media release about the future of the company??
what do others think?

its a nice statement if anyone can understand it. thats the thing, the company is too complicated and this is just another example of over complicating things. it will be a mission to unwind all the syndicates, who owns what and in what proportion does CNP own, what proportion investors in the syndicates owns, what proportion is debt. everything im reading says that the debt is complicated and no one can put an exact number on it with the on and off balance sheet situation. also the current liability versus non current liability could cause a problem and could cause legal problems. stick with stocks you know and know their structures. eg woolworths, brambles. miners
anyway thats what i do

Right I've been trying not to say anything about this but heck hearing this statement would probably send shudders throughout this board.

I AM A HOLDER OF THE CENTRO DIRECT PROPERTY FUND.

I've got 25K invested in this fund right now and theres no chance I can withdraw from it as the company has used their "responsible entity" to suspend any withdrawals from the fund following the announcements.

I only went with them because of their morningstar rating of 4 and relatively cheap MER ratio as well as a very big name but who would know they would have had this big a problem? Before the end of last week if you would have mentioned Centro to anyone here they would have endorsed it as a good investment in indirect property. I've really lost all faith in investing in australian companies after this. The level of company disclosure here is quite a FARCE and the role of ASIC and other regulators is no more than to be seen as having a watchdog so investors can feel a little more assured. But they have hardly done enough and I'm sure you'll find insider trading is rampant here more than anywhere else. I've also noticed the reaction of the markets here to a big name company affected by the global credit issues is far more severe than what occurs overseas. Look at CountryWide Financials in the US after it was hit with debt problems it didnt drop more than the 100% that CNP went through at the start of the week.

What protection does the retail investor have under these circumstances? Are we at their mercy right now?

lbradman said:

Right I've been trying not to say anything about this but heck hearing this statement would probably send shudders throughout this board.

I AM A HOLDER OF THE CENTRO DIRECT PROPERTY FUND.

I've got 25K invested in this fund right now and theres no chance I can withdraw from it as the company has used their "responsible entity" to suspend any withdrawals from the fund following the announcements.

I only went with them because of their morningstar rating of 4 and relatively cheap MER ratio as well as a very big name but who would know they would have had this big a problem? Before the end of last week if you would have mentioned Centro to anyone here they would have endorsed it as a good investment in indirect property. I've really lost all faith in investing in australian companies after this. The level of company disclosure here is quite a FARCE and the role of ASIC and other regulators is no more than to be seen as having a watchdog so investors can feel a little more assured. But they have hardly done enough and I'm sure you'll find insider trading is rampant here more than anywhere else. I've also noticed the reaction of the markets here to a big name company affected by the global credit issues is far more severe than what occurs overseas. Look at CountryWide Financials in the US after it was hit with debt problems it didnt drop more than the 100% that CNP went through at the start of the week.

What protection does the retail investor have under these circumstances? Are we at their mercy right now?

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I think the best Rd for you is to speak to a lawyer. All you will get on here are opinions, rather than concrete information.

That said, I'd say at this stage you can only play the waiting game. I think it's actually a good idea that your funds can't be withdrawn but I think it's a shame you, the small investor has to foot the bill.

On the plus side, the company is far from doomed. They are in trouble but they have good assets and cash flow. I'd be very surprised if someone wasn't willing to lend them the money. If someone like Centro was left to die the whole market would suffer via a loss in market confidence and this is something I don't think the big boys are willing to let happen.

I think this is a real wake up call for the industry. Hopefully it will make these companies more transparent and conservative with the amount of debt they take on.

Have a good Christmas.

UPKA said:

with the current SP, it gives CNP a market cap of $1.5b. With over $5b debt to be due shortly, $1.4b due in 2mths. I think thats really pushing it, CNP will need to sell off some of its assets soon, and cheaply... I think at $1.20, it reflects the company's value correctly, too much uncertainty at the moment, so I dont see any value in it at all.

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I think MQG recently sold their share in the company which I'm pretty sure was a majority (large) holding in Centro.

Centro faces $100m action

CENTRO Properties Group will be sued, possibly for hundreds of millions of dollars, over its failure to make proper disclosure of more than $1 billion of debt in the months leading up to its implosion on Monday.

See article at: http://www.theaustralian.news.com.au/story/0,25197,22961325-643,00.html

Shares will surly dive on Monday after this news.