short trem speculation, page-6

Hi Buffett

Where does the 80% dilution figure come from. I first saw this in the media but how do they come to that figure?

It may not be anywhere near that high. If Centro shareholders currently have some equity in the organisation, then even though you would expect some dilution, I cannot imagine the 80% figure to be correct.

The next point I want to make is that the accounts figures we use are now 5 months old. The banks would have access to the end November statements this week and things could have changed substantially (for better or worse) since June 30.

So while I am interested in the debate, its all pretty much pie in the sky at the moment.

The next point I want to make is that if a big discount is being offered for new equity, I would think that some of the existing holders would be happy to put some extra cash in to shore up their investment and take advantage of the discounted issue. So how the big shareholders of CNP will think about the equity swap when they probably have access to cash is a big question which I wonder whether anyone can answer.