Emde, take note of the fourth paragraph in this article (courtesy of Apple). Given improving market sentiments over the year this company will rebound strongly imo.
excerpt Business Spectator Tony Boyd "Centro's Close Call" 16/12/2008
"Chief executive Glenn Rufrano told a media briefing late on Tuesday night that directors faced a stark choice between either receivership or saving the company in a debt for equity swap.
The refinancing announced today covers $7 billion in debt including the $5.05 billion owed by Centro Properties and the $1.96 billion owed by the joint venture with Centro Retail Trust called Super LLC.
In relation to Centro Properties the banks will convert $1 billion in debt into hybrid securities with a maturity of seven years. These are convertible in seven years with all interest payable on them capitalised.
Rufrano said this was a good deal for the shareholders because the debt for equity conversion was priced at 13 to 14 cents a share, a significant premium to the last traded price of 6.8 cents a share.
The convertible bonds will not be able to be turned into equity without shareholder approval. That is in keeping with ASX listing rules.
The banks took what payments they could up front. They will be issued with shares in Centro equal to 14.9 per cent of issued capital and worth about $10 million to cover outstanding lender fees and expenses.
The banks have agreed to provide Centro with a three year senior secured loan of $4 billion. This will cover the debt owed to the eight members of the Australian lending group and the US noteholders.
Any free cashflow over and above interest payments will be used to reduce debt."
CNP Price at posting:
11.0¢ Sentiment: Hold Disclosure: Held
