Paying money for a newspaper which has printed a doom and gloom article tomorrow would simply serve as positive reinforcement to the publisher and, in my opinion, should be avoided at all costs.
Instead, I have taken the trouble to write a generic article which would be pretty close to what you are likely to read in the morning anyway. Perhaps you could consider giving your $3 to a homeless person or charity instead.
"Banks mull Centro future", SMH/Age, 16/12/08 by Swap.
Investors in the troubled Centro Properties face an agonising wait again today with the future of the group still in the balance.
Centro, Australia's highest profile victim of the credit crunch, got in to trouble in December last year after going on a debt-fueled acquisition binge both here and in the US under former CEO Andrew Scott. Since then, lenders have thrown the beleaguered company four extension lifelines as the group struggles to repay $[insert random amount]bn of debt through asset sales.
The group, which is effectively now controlled by its lenders, went into trading halt yesterday pending "an announcement of the outcome of negotiations.. before Wednesday 17th December".
Shares in the company closed at 8.7 on Friday, a far cry from the $10 asking price just over a year ago.
At the AGM late last month, the company informed desperate shareholders that failure to secure a debt extension would result in the group facing certain administration.
The company, led by US import Glenn Rufrano, is trying to persuade the lending group to take a leap-of-faith with a hybrid debt-for-equity swap. One source, who did not wish to be named for fear of ridicule by co-workers suggested that the swap is likely to significantly dilute existing holders. "Existing holders will be diluted by any debt swap and it could be anywhere from less than 1% to as much as 100% depending on the terms."
Shareholders will be asked to vote on the complex proposal at an EGM in the coming weeks.
289 of the 290 lenders to the group are understood to have agreed to the extension and the complex debt-for-equity swap, but it is understood that one bank, understood to be CBA, or another bank understood to be not CBA, are holding out for a better deal.
A company spokesperson declined to comment on the situation.
Another industry insider, who did not wish to be named, suggested that this was make or break time for a deal, "This is make or break for a deal" said the insider, "they will either get the extension or they won't. Either way, we should know today or at the latest, some time soon. I wouldn't want to be a shareholder if it all goes wrong but I'd kick myself for not holding if it all goes right."
In a further blow to the group, US retail sales were flat last month leading many to believe that shopping center tenants face an uncertain future. Experts agree that there is a chance some retail businesses may be forced into bankruptcy as the credit crunch and deepening recession both play out in the US.
An industry analyst suggests a grim future for the company, "They are in a difficult spot. Asset prices are definitely falling, except in the areas where they have either stayed flat or increased. If the company can't pull an extension off, then the banks are going to want their money back. That could mean disaster for Centro and push the remainder of the world another step closer towards a catastrophic, once-in-a-lifetime depression."
CNP Price at posting:
8.7¢ Sentiment: Buy Disclosure: Held
