How can you say there would be nothing left for shareholders if Centro went into administration?
The business was valued at $27b and they wrote down $2b in their last report (Feb 2008). The article in this thread said they owed $5b to the banks, but this is in the short to medium term and I understood the total is $19b (less the $322M half year profit and of course, the profit from the final HY that may be achieved).
So, if all their assets are sold and they achieve more than say 75% of their value, then that is about $20.25b (including 75% of the assets already written down on their current books). The net result would be amount of around $1.25B or about $1 per share after all expenses.
Now, if the assets were sold in a controlled way, the return might be considerably more but let's say for the arguement it might be only an 80% return - that would be $21.6b or lets say $2b returned to SH (thats about $2 per share!).
The key issue would be the time taken to do the sales, while paying off interest on loans as sales proceeded. However, in any case, it is inconceivable that SH would not get some return and probably from 50c to $2 or more per share.
IMO of course...
CNP Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
