I dont think recapitalising CER is a priority of the Centro Group right now. Should CNP raise equity I believe those funds would be used to shore up the balance sheet of CNP, not CER.
CER's Aust LVR covenants are now 65% as opposed to 55% previously and its ICR covenants havent been breached. CER has also shown to do well in raising capital by selling assets at a small discount to book value. This is a mauch better result for us rather than raising equity diluting EPS for current unitholders. Even if some debt has to be refinanced at a slightly higher margin, this is a much better result than destroying unitholder value by issuing billions of shares.
Everyone says debt is a dirty word well I think equity is even dirtier. Just look at how the GPT board have destroyed shareholder value there. I actually put up a post about this on the GPT thread.
Anyhow as I concluded in my previous post, lets wait and see!
Cheers
CER Price at posting:
18.0¢ Sentiment: Buy Disclosure: Held
