cnp agm, page-2

Hi Coppertop137,

I attended the CNP and CER AGM. The CNP AGM ran way overtime after about 30-40 questions about various topics. Two shareholder groups were present. CNSPA and the ASA. Stephen Mann also made an appearance.

The key questions raised was in relation to the Hybrid security plan or as they call it "Stabilisation Agreement". The key outake from this was CNP will not probably pay another dividend until near 2016 when the securities are due to convert if the company does not bring its debt to equity ratio back down to the 27 bank syndicates requirement it looks like we will have no hope but to convert these securities to equity, but it looks to me the key focus now is the seperation of the two companies from both boards, which they sell as simplifying the business.

No commitment was made to what and how this may happen, but IMO if they were to float CER in a couple of years and get a nice payment from that, pay down Debt and also get an increase in property values over the same time, this may put them in a position to renegotiate the "Stabilisation" Agreement.

I guess as a very synical shareholder I was impressed with the new board they have in place and also the care being taken to seperate the business of running the business from that of the various groups of action out there.

The new members of the board seem impressive and also bring a great background of experience.

The main challenge will be getting out from under the convertable notes, but the future does seem somewhat better for the business. They seem to be roling over debt relatively easily, senior management is stable and we seem to be seeing the bottom of the property market in the USA. Obviously property write ups will help to improve the situation quickly, but I think they see this at least at two years away. Nothing said though, just reading between the lines.

Paul Cooper was very measured and calm and handled a lot of questions from shareholders about the past year. The main outtake for me was that we seem to have all hands on deck and that the new board seem to have their hands full trying to really maxmise their returns from the assets the business holds.


All effort was made to be very balanced and straight forward with everyone on what has happened.

Its a keeper for me in what I see as a strong board who are focussed on creating the greatest turnaround story in Australian corporate history.

But time will measure this and other opinions.

Just my outakes..... and some feedback for those who could not make it.

All resolutions passed, which have now been released.