There are essentially two forms of insolvency -administration...

There are essentially two forms of insolvency -administration and receivership. The difference between the two is the directors (or forced creditor - eg ATO) initiate the first, the second initiated by the banks.

Look at it pragmatically :

Directors if they were talking about notional distributions - that is AFTER all expenses have been met - in other words the business is very profitable - so if that is the case - why woudl you appoint administrators ?? it is frankly RIDICULOUS in the extreme even to suggest it.

Bankers will LOSE big time if they appoint receivers - capital value of properties IN A FIRE SALE would erode equity (which represents the banks cushion - that is why they usually leverage up to 70% commercial property value. So the "secured" banks won't crystallise a LOSS - especially given the finance sector (in Stockmarket) has already lost >30% this year alone - why risk undermining your own SP - especially if the debts are beign serviced. So SECURED banks would NOT appoint receivers.

It is the unsecured banks which are the grey area (IMO) - but if all banking covenants relating to the unsecured debt are being met - typically being interest cover and liquidity ratios then why would they appoint - because THEY would in all likelihood RANK BEHIND the main lenders - they are TAIL-END CHARLIES. If there had been difficult bankign covenants in place - eg related to market cap - WE WOULD HAVE HEARD BY NOW. Equally where there are multiple banks involved there would be deeds of priority in place and co-joint decisions - ie multiple banks would need to agree to an appointment of the receivers.

As a result logically in the absence of defaults INSOLVENCY IS NOT AN ISSUE for CNP.

The issue is for balance sheet re-structure - it is as simple as that so the sooner people realise that yes the company is struggling in its re-structure - it is not about INSOLVENCY - there is NO hint or indication that bills aren't being paid or interest and capital repayments are not being made.

So please lets be sensible about this issue - INSOLVENCY is NOT an issue there are too many vested interests that would be screwed by that - so it is just a question of re-structuring which is happening so with time we would expect CNP to return to a sensible SP once more (not the heights of $10 but certainly well beyond $1.50 in the medium term (ie post Sept 08 and the re-fi).

I hold and look forward to medium term rewards

Just my thoughts Please DYOR

PT