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CNP - Centro Properties Group

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Greater return comes from greater risk taking. The journalist only wrote what she thinks "it's supposed to be" There's no solid evidence back up what she's saying.

I am not saying CNP will definitely get out of trouble here. However I can see that investors' confidence is going down because people are not thinking rationally these days and short-selling players are taking advantage of this kind of mentality.

If the share gets bust, well, you lose all the money; if CNP get out of its debt, I will be sure the SP will go up close to its bookvalue. We are making a decision based on -$ or at least $$$$. opportunity cost guys. Before buying this share, you have to ask yourself, do you trust the management or not?
 
I would suggest that there is a lot more to the CNP situation than whether or not one trusts the management. An awful lot could happen that is completely outside their control.

Incidentally, call me naive, but I can't imagine investing in a company in which I had reason not to trust management.
 
Money is yours and decision is yours too.

If you are not sure about the company with too many hidden issues then "void" it. There are plenty of clear, good ones around.

I entered when it was over $1, have lost 15% on this. Lucky I jumped out before. otherwise it would be BIG loss for me.
 
In the current situation, is it safer to buy CER instead of CNP?

If CNP solved its debt fanacing problem, SP of CER would roket as well I believe. If CNP went bust, CER at least has net assets.

What do you think, guys? By the way, I sold all the CNP today which I lost 30% on it. I am very very sad!
 
CER and CNP are co-investing companies. You are asking "can I still play footy if one of my legs has been chopped off".

Sharemarket in general is not safe. There is no absolute. I'd say buy a property if u've got cash. Coz the price is low right now. with the population growth rate currently, it will go up in a few years.

I don't see CNP's debt problem is caused by the management. Sub-prime punished all high gearing level companies in general. The management didn't make any major mistakes (the auditor Pwc skrewed up the balance sheet) . You can't blame the management on an unexpected "natural disastor".
 
CNP are fighting the Pelorus takeover raid of another of their managed fund companies from which they earn millions in management fees. If they are fighting hard as they are then it seems they feel they still can solve their problems and keep CNP going. If the management felt it was all hopeless and they have all the information we do not have, then they would just advise the shareholders to agree to a management takeover as a solution. This is not what they are doing but conversely they are advising holders in no uncertain terms that they are the superior manager and to keep them on. This tells me that CNP is struggling but have no intention of throwing in the towel and there is plenty of time for them to resolve these issues. This week is the last week for any bidders/investors to show their hand and we will know by the end of the week what the mid to long term outlook is i think. The down trending SP this week reflects the negativity of the media and the market but this does not mean that the week will end in bad news. Wait & see
 
the only positive thing i can think of now is recently there has been no CNP announcement of "xxxx ceasing to be a substantial holder"

i am going to hold onto my shares and see to the end of this
 
Some brokers are paying the media to write bad news and they can play short-selling behind the scene and make profit.
 
The thing there is that the substantial holders did all their ceasing a while ago. Are there any substantial holders now? We may be in quicksand with this one you know. I am going to sleep on it and decide by end of the week if I cut my losses or hang in there for the duration. Its a hard decision to make.

sonicwind said:
the only positive thing i can think of now is recently there has been no CNP announcement of "xxxx ceasing to be a substantial holder"

i am going to hold onto my shares and see to the end of this
Click to expand...
 
vida said:
The thing there is that the substantial holders did all their ceasing a while ago. Are there any substantial holders now?
Click to expand...

In late December there were:

ING 8%, CBA 6.42%, Deutsche Bank 5.8%, Barclays 5.14%, UBS came and went quick, MCQ was out mid December, but checking through notifications of ceasing I can only find the UBS and Barclays in 08, CBA, ING, Deutche Banks still on the books? Somone with a better account at their brokers might have access to this info.
 
Citicorp Nominees Pty Limited 63,789,464 7.55
30/08/2007 Citicorp Nominees Pty Limited (CFS Wsale Property SECS A/C) 58,987,043 6.98
30/08/2007 J P Morgan Nominees Australia Limited 111,724,817 13.22
30/08/2007 National Nominees Limited 96,368,284 11.40
30/08/2007 HSBC Custody Nominees (Australia) Limited 137,356,600 16.25
21/01/2008 Commonwealth Bank Group 84,808,967 10.04
13/11/2007 Macquarie Group Limited 48,724,197 5.76
 

I've predicted a loss around 7-8% for the comming day last night(check my previous post) due to the bear stearn. It's your money and your decision. CNP will go down for another 2 weeks.

Only 2.75b is due in April. The news posted early today is aimed to create fear in decent investor community and help those DH make profit by short-selling
 

Hi Ricky, how do you know CNP will go down for the next 2 weeks (mind you probably every stock will LOL). This week I believe is the close out for official offers, guess see what happens.

I'm not sure how you get 2.75b due end of April, I thought it was nearly 4.9 billion or so?

As for Laura Cochrane article well, if do a quick google she's been on the job for bloomberg online since Nov 06, about 14 months in an online division if this is correct, 4 years at RMIT 99-02, I also found a site (Cant relocate) with most her articles, 75%+ I'd say were all about Centro, not a rocket scientist to recount rumor and innuendo especially if trying to make a name for yourself. My opinion is if your going to write articles, quote the source, if not, it's nothing but hearsay or using a source who won't go on the record is as good as rumour mongering, that's not reputable journalism and reckless IMO unless all sources can be verified pubicly. We wouldn't tolerate a poster here making unsubstantiated claims, amazes me that journalists can. Not saying she 'may' be right, who knows, but it stinks to me that can be presented that way.

The market is brutal at the moment, Centro is silent, you know it could go either way IMO, though I doubt the Aust lenders will in the event of lack of CAF\CAWF sale or an equity offer let them go as long as Rufrano has the restructure in debt clarity he's been touting ready in place by end of April. It would destroy the lenders in this climate to let Centro which is a profitable on -going concern go under due to what is a capitalisation issue, which again, IMO while CNP are servicing the existing debt without any issues they'll survive this at least to the Sept date set out by the US lenders, the big question to me is debt servicing, if Centro can show it's no issue I can see them riding it out provided the lenders don't panic like the market has, this market is shattered, Centro are paying the lenders good money why not milk it, see if they can ride it, at the point their looking like can't pay the interest, then close it up, for the moment that's not happening.
 
I do hope Centro can get out his trouble, here is an interesting news!

Centro Bid List May Include Macquarie, Blackstone, Review Says

By Jacob Greber

March 18 (Bloomberg) -- Centro Properties Group hopes to draw up a short list of potential suitors this week that may include Macquarie Group Ltd. and Blackstone Group LP, the Australian Financial Review said.

First round offers are due this week and Macquarie hasn't been ruled out as a possible bidder, the newspaper reported without saying where it got the information. Executives from Blackstone may have been in Australia last week, the Review said.

Blackstone may consider taking part in a recapitalization of Centro, or buy assets from its banks, the newspaper said.

Centro, the owner of more than 670 U.S. malls, must refinance A$4.9 billion ($4.5 billion) of debt by April 30. Centro's banks include JPMorgan Chase & Co., BNP Paribas SA and Commonwealth Bank of Australia.

To contact the reporter for this story: Jacob Greber in Sydney at jgreber@bloomberg.net
 
That is not good news, recapitalisation would be the best outcome for shareholders but buying assets from its banks implies the company is in liquidation mode and taken over by the creditors. The market does not like is as the SP is diving more this morning. I wish CNP would announce something positive quickly, they are being far too quiet and silence can mean anything.
 

Funny part is the article is totally opposite another reporter from the same source AFR\Bloomberg yesterday, tells me they dont know either for fact anyway on anything lol, depending on who you read or talk to.
 

So what is the brutal honest truth for a share holder currently holding this stock?

I foolishly purchased this stock at 0.45, hoping that as this company had valuable assets in Australia and a bunch of tennants who were not suddenly going to pull out of their shopping centres that they would be able to survive the current market volatility.

Having witnessed what has happened to Bear Sterns over the past 72 hours I am no longer so sure.
 

I wouldn't worry yet until they make some sort of announcement. I bought in at a much higher SP than what we've seen in the last 2 weeks. If a recap scenario is unveiled with financial backing then we are likely to see a doubling or tripleling of the SP.

The risk with selling now is the chance that the stock goes into suspension due to recap or buyout announcement. If this occurs then you may have missed the boat. A few articles have pointed out that the bids are due before easter. So it is possible that the SP goes into a trading halt or suspension while Centro analyses the different offers. I suspect the offers will be mostly from overseas entities. Macquarie Bank may be the only exception. A likely scenario is a cashed up property investor recaping the company and take a controlling stake of Centro. Overtime they will sell the property assets in a more stable market. Blacktstone will probably take it private. I don't see a passive investor taking a stake in this.

I would argue that nothing has really changed since the annual report was released. The SP movement in the last few weeks was driven by fear due to the general market sentiment. Centro is a high risk investment maybe some have only just begun to realise that now? A lot of the movement can be guessed by using the Beta on the company. (it was around 2 last i checked, this probably hasnt been updated for a while from Commsec). This means that if the market moves down 3% then we are likely to see CNP go down by 6%.

Anyone else had a laugh at the Pelorus reply to Centro's letter? It's like watching a current affair show.
 
Yes there will probably be an announcement on Thursday, Friday being a holiday. I sold this morning as I got too nervous with the SP plunging. At least I won't have to pay CGT now. hmmm. But i may buy in again before end of the week just to stay in at a lower SP, it all helps if I risk even just bit less


 
Regardless of the outcome of the battle over MCS16, i admire the efforts Pelorus has put in, Centro on the other hand has been rather disappointing...
 
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