cer and the us$, page-8

Shmi,

Is it possible that the major concern CNP has is not a desire to hang on to an asset with potential growth, but rather that with a controlling interest it can carry CER assets at their book value whereas if its ownership falls to less than 50% the CER interest will be carried at its (lower) share price?

If so then a CER split might yield a potentially low geared CER-AUS which would trade closer to NTA if seen by Australian investors as less risky and worthy of a reasonably priced capital raising. Then there would be a higher geared CER-US which would trade below NTA and in which CNP would retain its ownership interest?

If this is the case, then extra capital for CER-AUS would not dilute so much - CNP could actually consider selling its interest in CER-AUS? This might appeal to the banks?

Whether this would work depends upon many factors I'm not across but I note that the Aust operation has net assets of about $1.4b, US is about 0.6b (after LLC 0.6b provision for loss) and there are "CER Operations" liabilities of about $1.3b to allocate across the two in some way. Not sure how you would determine which liabilities would be AUS and which US? Would presumably be dictated by individual financier's preferences/negotiations?