The reason CER is up is in part due to the fact that the report...

The reason CER is up is in part due to the fact that the report which came out this morning adds weight to the belief that SuperLLC will survive.

As a bit of background, SuperLLC is a JV between CER, CNP and one of the MCS syndicates. It's SuperLLC that got us into the mess we currently find ourselves in. The $299m is primarily non-cash and will doubtless be apportioned across the entire JV so all 3 entities will take a part of the loss.

In the Dec 2007 half, the SuperLLC impairment charge for CNP alone was $578m so it could well be that the worst is behind us.

The SuperLLC liability for CER is 'ringfenced' which means that if SuperLLC falls over, CER exposure is limited. On the most recent numbers we have (Dec 07), CER has NTA of ~$1.65 and if SuperLLC falls over (which is seeming less and less likely), this drops to about ~$0.95. These numbers will have doubtless changed in the last half, but you get the idea.

It is really important to realise that Centro NP is only part of the SuperLLC picture. Centro NP only files SEC reports because it has bonds on issue in the US. SuperLLC, which is the main entity is not required to file. In looking at the Centro NP results, you are only seeing part of the picture.

.. however the picture does not look as stormy as one might imagine. CER is trading at a major, major discount to NTA. If SuperLLC survives (which the report today adds weight to), the discount to NTA is even larger. I guess that once analysts and investors in-the-know realised this today, the CER share price recovered.