Coopertop on your paragraph: "Let's say the banks own 15% of CNP...

Coopertop on your paragraph:

"Let's say the banks own 15% of CNP and the rest of us own 85%. Let's also assume that this conversion business happens by vote in 7 years time for a piddly 1 bill of debt.

Come voting time would you as part of the 85% shareholder vote in favour of it? No way, you would vote against it so you don't get diluted with billions of shares at 13 cents.

The only votes in favour would be the 15% holders. This is why I think buffett is correct. Why would the banking groups open themselves up this way when it's all buit resolved to save Centro and give them all the upside?"

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If the S/h vote it down, then Centro must repay the matured notes to the banks in full. If Centro can't, then administration (since S/H rejected the conversion).

I would expect CNP management to outline to S/H at that time on whether CNP has scope to pay off the debt. If there is scope (either through capital raising, etc) then there is no issue and Banks get their $$ back, no dilution and notes repaid.

If CNP can't repay the debt, then S/H will vote in favour b/c then it avoids administration and instead of losing 100% of your investment, you dilute it and still get a bit back.

The bankers do have upside via their 14.9% shareholding.

That's how I see it working and is logical.