cer will trade below 4 cents, page-27

CT

Mate I dont know what to expect. Look using the proceeds to pay down debt is not a bad thing in the long run.

I sent the below email to Kylie this morning.

If they can continue to pay down high cost debt, this is really going to improve ICR significantly and make CER much more cashflow positive in the long run.

For example, I'd like to see that US$73m debt that costs 11.67% per annum paid off as soon as possible.

Cheers




Dear Kylie,

Thankyou for the prompt reply. It is greatly appreciated.

Is CER's strategy to pay down debt that is relatively expensive first as opposed to paying down cheaper debt?

I note that the cost of the variable facilities have decreased significantly in the last 6 months and little capital has been used to pay down this debt except for when the Australasian assets were sold last year.

Obviously when an asset is sold, the debt that was secured against the asset would be extinguished first, but in most cases would you look at reducing the interest expense as much as possible by paying down expensive debt.

For example, the following debt facility has an extremely high interest rate.

I note that about $5m was paid off during the 6 months ending 31 Dec 08 but would you be looking at trying to extinguish this debt in the near future as it costs CER (US$8.53m per annum 73.1 x 11.67%)

REMIC - 01-Jun-28 - $73.1 - $105.6 11.67%
Many thanks,