CNP - Centro Properties Group

mapna · 26 June 2008

I reckon the today news about the assets for sale is not really that simple as there is a condition with the sale that CNP would maintain the mgt right for the assets. This to me sounds like asking someone to buy the center but not allow to mgt them. Just like asking ppl to put money into the fund for them to manage ????

The more I read the article the more I felt like fire-sale b4 30/09 than a normal transaction ....

Anyway, this is my own opinion and I am wrong most of time ...

DYOR ......

wilko66 · 27 June 2008

I'm not too fussed about that Mapna....there are plenty of potential buyers that won't have the resources or expertise to manage. I think its fallacy to assume all buyers even want to manage.

Whether management rights are in or out of the package sold, it'll all be factored into final valuation. The key issue for us as holders (my opinion) is how the parcels ultimately perform vs current valuations.

Also, given the time frames it's far from firesale. Centro could have felt pushed to rush to get an outcome and some positive news out but given May 8 was last extension, mid August is quick but not indicating panic in any way.

gensis1 · 27 June 2008

wilko66 said:
I'm not too fussed about that Mapna....there are plenty of potential buyers that won't have the resources or expertise to manage. I think its fallacy to assume all buyers even want to manage.

Whether management rights are in or out of the package sold, it'll all be factored into final valuation. The key issue for us as holders (my opinion) is how the parcels ultimately perform vs current valuations.

Also, given the time frames it's far from firesale. Centro could have felt pushed to rush to get an outcome and some positive news out but given May 8 was last extension, mid August is quick but not indicating panic in any way.

Hi wilko66,
services income is not included in those valuations..(they never are because it is considered a separate business)and they are written down valuations because cap. rates have dropped..so centro are offering mostly 50% of their best yeilding properties at bargain rates(they would have been crazy to give away 100% of all of them)...I think there will be alot of interest for these, especially super funds..I wouldn't be surprised if they had clauses in the contracts to buy the interests back at a future date, once they've restructured..

wilko66 · 27 June 2008

Sorry Mapna, I meant that from a buyers perspective, what they'd be willing to pay for the "package" would already have factored into it the getting or not getting of the rights. I know the book value of the properties is exclusive of the management business but assuming the market values a property at an amount then it's reasonable to project if management rights were thrown in they'd pay more.

The fact they are both valued and sold exclusive of these rights means to me that the only consideration now is how the sale price fares vs book value.

No?

wilko66 · 27 June 2008

gensis1 said:
Hi wilko66,
services income is not included in those valuations..(they never are because it is considered a separate business)and they are written down valuations because cap. rates have dropped..so centro are offering mostly 50% of their best yeilding properties at bargain rates(they would have been crazy to give away 100% of all of them)...I think there will be alot of interest for these, especially super funds..I wouldn't be surprised if they had clauses in the contracts to buy the interests back at a future date, once they've restructured..

Gensis, my last post was meant in reply to your post (I addressed to Mapna...sorry)....Also, not sure I read you correctly on the 50% aspect. In my reading, the 50% relates to the fact that some of the properties on sale are only 50% owned by Centro...not that they're selling 50% of their properties. My opinion is that the course they're undertaking shows a fairly high degree of controlled disposal considering the backdrop.

gensis1 · 27 June 2008

wilko66 said:
Gensis, my last post was meant in reply to your post (I addressed to Mapna...sorry)....Also, not sure I read you correctly on the 50% aspect. In my reading, the 50% relates to the fact that some of the properties on sale are only 50% owned by Centro...not that they're selling 50% of their properties. My opinion is that the course they're undertaking shows a fairly high degree of controlled disposal considering the backdrop.[/QU

sorry wilko66,I meant CER aren't selling their 50% as well...yes controlled sales..win win for all...

$$Punt$$ · 30 June 2008

Wonder why there is no media coverage or reports on CNP recent court litigations? I guess no news is good news. And there seems to be strong market support for CNP SP at around 24 cents. Umm.......wonder any positive announcement soon!

vida · 30 June 2008

No media on litigation as its all happening at the lawyers and that is all private and confidential legal work, nothing is due to be dealt with before the court I would think so no public information at this stage. Any leaks from either side can unfarily prejudice their respective cases. Until the next court date, nothing will be due to be announced in relation to the litigation. That is my personal view on it. It will be a long time before a settlement offer of any kind is announced and/or whether and when a trial date is announced and is what will really matter and bring it to a resolution one way or another. In meantime the litigation only works to fuel uncertainty and will continue that way for some time. So we should forget about that for the moment I think and focus on the company's restructuring efforts and look forward to recovery

$$Punt$$ · 30 June 2008

vida said:
No media on litigation as its all happening at the lawyers and that is all private and confidential legal work, nothing is due to be dealt with before the court I would think so no public information at this stage. Any leaks from either side can unfarily prejudice their respective cases. Until the next court date, nothing will be due to be announced in relation to the litigation. That is my personal view on it. It will be a long time before a settlement offer of any kind is announced and/or whether and when a trial date is announced and is what will really matter and bring it to a resolution one way or another. In meantime the litigation only works to fuel uncertainty and will continue that way for some time. So we should forget about that for the moment I think and focus on the company's restructuring efforts and look forward to recovery

Good points. But don't understand why CNP doesn't provide market update given there is so much rumours/ interests in the stock. Surely at least a monthly update will restore some confidence and calmness to shareholders. Most announcement if there is drives the SP down or panic selling. Extremely volatile stock thrives on media reports and any good news will spike SP upwards.

gensis1 · 30 June 2008

$$Punt$$ said:
Good points. But don't understand why CNP doesn't provide market update given there is so much rumours/ interests in the stock. Surely at least a monthly update will restore some confidence and calmness to shareholders. Most announcement if there is drives the SP down or panic selling. Extremely volatile stock thrives on media reports and any good news will spike SP upwards.

You only have to look at the may 8 ann. on a 'decision on CAF over next 30 days' comment...this shows that the less info is given to shareholders the better,cause they can look to be misleading...I can only image that the negoiations they are in, are many, and constantly changing,so updates would be the same and probably confusing...

wilko66 · 30 June 2008

Shareholder letter just landed...see CNP at 3.45pm;

http://asx.com.au/asx/statistics/todayAnnHeaders.jsp

Not price sensitive, just a rehash of last few months from Centro mgmt perspective. Nothing new but a reasonable summary.

gensis1 · 30 June 2008

wilko66 said:
Shareholder letter just landed...see CNP at 3.45pm;

http://asx.com.au/asx/statistics/todayAnnHeaders.jsp

Not price sensitive, just a rehash of last few months from Centro mgmt perspective. Nothing new but a reasonable summary.

Did he say they are "selling the CAF" or have they sold the CAF....Not much info on this crucial element..maybe investor relations can give more info???

vida · 30 June 2008

The price sensitive info we need to hear is that they have sold assets and paid down debt in significant amount, that will bring up the SP & our mood too

ProRip · 30 June 2008

ppl you are very emotional investors (ahhh I suppose that is half the fun jez this is my first stock and I panic less than most the investors on this thread (although I do only have a small punt on CNP), I believe like a few other posts that CNP will not announce anything unless deals are signed sealed and delivered, with the court case\media on their back they can ill afford any sign of mis-leading information or confusion. So it comes down to your own judgement you need to make an assesment of the companies direction in the next 4-5 months and stick with it. So many emotional investors, day traders and now EOFY are making the SP unstable (you need to see through this). I made this my first investment because I believe like many that CNP is undervalued (when I bought at 27c about 3 mths ago) even in the worst case event of a fire sale I believe that at worst I would recieve the money I put in back, or thier abouts. Yet the reward I would gain If I hold for maybe 12mths would maybe be 200-400%.

Lets try to keep this forum to good assesments\information and not wishful thinking

$$Punt$$ · 30 June 2008

I am happy with the market update by CNP today. This is what investors want to know even though there's not much new information....to keep investors know what's going on rather than hearing from media reports. I believe CNP SP will open stronger tomorrow with this update folks. Good luck.:

sonicwind · 1 July 2008

An article in the Age today:

Centro's a goner
For those bold and foolhardy troopers with the risk appetite to punt on a recovery in the beleaguered Centro Property Group, it may be worthwhile to know that the debt is more of a bargain than the equity.

The convertible notes are bid at 7 cents and offered at 15 cents, which makes them six times cheaper than the shares. Mind you, what this really indicates is that the equity is hardly worth a zac; at least not the 25 cents a share, which it still fetches.

Gallant newspaper reports of a takeover bid poised to swamp the market at $1 a share are perhaps not even fit to wrap the fish in now. But it is the price of the debt which is a worry. Were there any hope of a decent bet on Centro rebounding, the professional investors would be all over these notes. They were trading at 22 cents before the distribution was cancelled. She's a goner.

vida · 1 July 2008

If Centro was a goner why would the management be bothering with the huge restructuring efforts which are costing a lot of money, and the refinancing extensions are also costing. They are making the best commercial decisions for the company and investors and clearly they do not think it is the end of the line, nor do the banks otherwise so many extensions would not have been given and it would already have been 'gone' by now.

See below, CNP owns and manages more than $24 billion of shopping malls around the world - so it can manage to sell a few and pay the debt in time.

*********************************************************

Centro Seeks to Sell A$309 Million of Malls to Pay Down Debt

By Laura Cochrane

July 1 (Bloomberg) -- Centro Properties Group, which last month won its fifth extension on a deadline to repay as much as A$6.6 billion ($6.3 billion) of debt, is seeking to sell five of its Australian shopping malls to help pay down its obligations.

All of the assets of the unlisted Centro MCS 9 syndicate are up for sale, Melbourne-based Centro said in a letter sent to investors and e-mailed today to Bloomberg. The unit's malls were worth A$309 million as of Dec. 31, according to Centro's Web site.

It is an ``optimum time'' to sell the assets, Centro said. ``Certain shopping centers recently offered for sale are achieving strong sale prices irrespective of tight credit conditions and rising interest costs.''

Centro Properties, which owns and manages more than A$24 billion of shopping malls in the U.S., Australia and New Zealand, has plunged 96 percent since Dec. 17 when the company said it was struggling to refinance debt as the seizure in global credit markets shut funding avenues. Centro fell 2 percent to 24 Australian cents as of 3:52 p.m. Sydney time on the Australian stock exchange, valuing the company at A$203 million.

Centro MCS 9 owns Centro Hollywood in South Australia, Hamilton Central in Victoria, Centro Dianella in Western Australia and the Raintrees Shopping Centre and Centro Gympie in Queensland state. The malls have occupancy rates above 95 percent.

Centro Properties has a stake of about 6.3 percent in the syndicate through its holding in the Centro Direct Property Fund, according to the statement.

To contact the reporter on this story: Laura Cochrane in Melbourne at lcochrane3bloomberg.net.

$$Punt$$ · 1 July 2008

Centro goner? Its typical media of irresponsible and sensationalized reporting. The writer should be sue for damages for making such a bold public statement. CNP should clarify the matter as many like us shareholders get worried by reports like that.

vida · 1 July 2008

That "Goner" article is in the frontlines of The Age and am sure it should elicit a response from CNP. Hopefully it doesn't cause a panic selldown tomorrow.

9krpm · 2 July 2008

sonicwind said:
An article in the Age today:

Centro's a goner
For those bold and foolhardy troopers with the risk appetite to punt on a recovery in the beleaguered Centro Property Group, it may be worthwhile to know that the debt is more of a bargain than the equity.
[snip] She's a goner. :bad:

That's just an absolute disgrace! I've complained to the paper/presscouncil/mediawatch (and journo mwest@fairfax.com.au) and urge others to do the same!

:badass: 9k

CNP - Centro Properties Group

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