Why talk down the possibility of the creditors putting CNP into liquidation? If the shareholders refuse debt-equity swap (if the banks even want the swap) they will be shown where to insert their share certificates.
CORPORATIONS ACT 2001 - SECT 95A Solvency and insolvency
(1) A person is solvent if, and only if, the person is able to pay all the person's debts, as and when they become due and payable.
(2) A person who is not solvent is insolvent.
CORPORATIONS ACT 2001 - SECT 459A Order that insolvent company be wound up in insolvency
On an application under section 459P, the Court may order that an insolvent company be wound up in insolvency.
CORPORATIONS ACT 2001 - SECT 459P Who may apply for order under section 459A
(1) Any one or more of the following may apply to the Court for a company to be wound up in insolvency:
(a) the company;
(b) a creditor (even if the creditor is a secured creditor or is only a contingent or prospective creditor); [...] END
I'm looking at the financials on Commsec.
30 June 2007 Current Assets $1.338 Billion Current Liabilities $1.753 Billion Liquidity Ratio of 1.31:1
An LR of less than 1:1 is one of the warning signs of a company being mismanaged into the ground. The writing was on the wall back then.
30 June 2008 Current Assets $1.941 Billion Current Liabilities $9.504 Billion Liquidity Ratio of 4.87:1
Absolutely catastrophic!
It doesn't matter what CNP's total assets are. It ONLY matters that it can pay debts on time.
Does anyone honestly believe that the banks won't liquidate? Of course they will, because they are almost certainly secured creditors and will be first in line after the administrators/receivers/liquidators and the employees to be paid.
Unsecured creditors, noteholders and shareholders will be given the pointy end of the stick.
CNP Price at posting:
6.9¢ Sentiment: Sell Disclosure: Not Held
