managment reporting, page-24

Octain,

I agree both sides of the coins should be looked upon so i see here are some hinderances / hurdles for cer.

1st is the lawsuit made by 2 separate parties.

My understanding is this is due to errors in reporting of current liabilities in one of the yearly reports.

I never actually saw the figure that was claimed for damages but the media was reporting some figures all over the place and 1 had an exuberant figure like UP TO 1 BILLION Dollars.

This figure must of been downsized somewhat as CNP/CER wanted this settled through mediation and out of the their hair.
Then price waterhouse coopers was dragged into this with CNP/CER threating to sue as they were the auditors who signed off on this.

Then stepped in ASIC. This might of been advantageous for CNP/CER as it seemed ASIC didnt seem to recognise the fault with CER/CNP management but wanted to build a case that management should of been aware of price waterhouse coopers error.

The case of 2 parties that were originally suing CNP/CER must of been effected by ASICs involvement as they then changed to suing CNP/CER/Pricewater cooper.

This could probably go either way and i haven't really heard much on it lately.

2nd problem is their debt. There's been a lot of successful refinancing happening.

CER - HY10 Results Announcement
"A critical achievement for CER in the past six months has been the progress made in
addressing the debt maturities that fell in the first half of FY10. As at 30 June 2009 CER, on
a look-through basis, had A$583.5 million of Australian secured debt and US$521.6 million
of US secured debt falling due within the upcoming twelve months. Of that debt, all but
US$9.6 million, which is due in the coming months, has been successfully refinanced or
repaid." 24th feb 2010

This a great achievment but CER still has around 1.6billion dollar of debt due to be refianced by the end of this year.
This debt is mainly SUPERLLC debt. A trust owned by CER.

This is pretty much what all the capital transaction is about.

However i think CER likes this trust as it does make lots of money just like the other trusts it owns and so may dissect, chop up and sell some of the other trusts, sell superllc or dilute superllc.

I posted before about CERs equity of 21c in this trust that is not included in CERs NTA as i would think that if it got diluted it might dilute this 21c to practically nothing but this would still leave CER with a NTA of 35c. This is just anyone's guess.

I'm hoping that management is true to it's word when they hired UBS to UNLOCK VALUE IN CER and they are referring to this 21c that is been locked up by cnp. we might only get a nta of 5c out of it but that still means our NTA would be 40c as a result. We dilute but it's on something that most people didnt realise that we actually had.

The capital transaction does worry me though as it seems to be deadlined by management when we are at a bottom of a cycle.

These are my opinions on the negatives and trust me when i say i'm definately no expert and find myself parroting other posters and copy and pasting news paper articles.
I have no idea about the legals and would love someone who has been keeping an eye on this to better my understanding.

CER is riskier then the likes of WDC.

I hope anyone who buys their shares consider doing their own research and understand whilst CER has been paying dividends, it still very much a speculative share.