cnp survival, page-13

Who can blame people for being ruffled up with the likes of ABC & AFG falling over in the last few days... This is not a game being played, serious business for sure.

I think centro's circumstances are vastly different to the others though, and in different businesses.

As apples rightly mentions, the Services Business is a massive income generating unit that would be completely destroyed if centro fall over. This business would now be even more highly valued due to the falling AUD$.

The next 4 weeks will be make or break. GR has already indicated if the banks don't come to the party with the hybrid debt/equity swap, then most likely they will be handing over the keys... they are not interested in another year of 3 months rollover at a time.

Next year will not be much better than this year for asset sales IMO, so what is the point of having 3 months extension as not many sales will be able to be achieved until the economy turns around, but the type of business centro has (non-discretionary spending) will well place centro during recessionary times...

I have no idea in what sort of terms the hybrid debt/equity swap could be, however if only a few lenders aren't keen on this, then as long as these few lenders grant a long term extension - say 2-3 years, centro will no doubt do a capital raising when the time is right, in order to pay out these few lenders.

If CBA for example have a large portion of their loans secured, what would they gain by demanding to be paid back now, rather than allowing an extension in line with a hybrid issue for other lenders, with a strong possibility of being paid in full plus interest within the next couple of years. The alternative is, Centro go under, yes they may get a large portion of their loan back now on centro, but what about the wider community and their other customers, and the flow on effect of putting on $B's of property into the market at the same time...

The overall picture has to be considered.