asset sales

Well, word is out about asset sales. Fairfax have some details in The Age, which is IMO the third worst publication in Australia, behind New Idea and Woman's Day.

Fairfax used the phrases 'fire sale' and 'sinking ship' which reinforces how little they actually know about the process and the impact it will have on the company.

Those of you with whom I have had email contact recently will know that Swap & Co researched asset sales and used some contacts a while back to uncovered details on what was going on. We were waaay ahead of Fairfax on this one.

Yesterday, those of you on CNP day shift would have seen that I posted cryptic details here

http://www.hotcopper.com.au/post_single.asp?fid=1&tid=680301&msgno=2921091#2921091

and here

http://www.hotcopper.com.au/post_single.asp?fid=1&tid=680301&msgno=2921491#2921491

"there is no keeping up with the Jones on this one as you risk Languishing behind on The Sale." equals of course Jones Lang LeSalle.

It appears from our research and the Fairfax article that Centro have decoupled some of the properties from CAWF and are selling them separately. A very, very smart things to do and in keeping with them saying that they have had significant interest in individual properties.

I gave some details of where the properties are located and they are being marketed (and will sell) at or above book in most cases. As I suggested yesterday, you could easily verify this yourself if you used the right approach. Fairfax obviously took up the suggestion. You will see that some of the properties are co-owned with CER so the sale of the whole property will be an uplift on CER as well.

Jones Lang are running the operation centrally in coordination with Centro HQ in Melbourne and assistance from various state offices.

It also appears that the remainder of CAWF has been sold or is in the final stages of being so. This was the cryptic last para in the posting. This is the one point I want to see final details from the company on as there are some complexities involved around ownership. It will be in keeping with the company plan, which has been stuck to since 17th December last year.

As you know from the Centro presentations, CAWF has FUM of $2.6bn owned across CNP and DPF.

Folks, if Centro announces the sale of the individual properties and CAWF on Friday or Monday (this is part of the 'big' ann I have been going on about for a couple of weeks), by my calculations they will have the ability to retire around $2bn of debt across Centro vehicles. That's right, $2bn. I'll leave you to work out what impact this may have to the market view of the company.

If they have been able to retain management rights on some or all of the properties, they will be able to pay off the debt but retain services business income. We'll have to wait and see on this point. It really would be the icing on the cake if they have pulled it off.

Now hopefully you can see the importance of the 'administrative' items, including inter-lender agreements, due this Friday. The lenders need to work out who gets what.

We are also due updates on a number of other points that I have previously outlined and one would hope these will be forthcoming too.