I think you might be getting a little confused with the structure of the Centro group.
It may be worth referring back to pages 20 and 21 of the presentation issued on 17/12/07. These two slides outline the structure of the group and who owns what.
It is important to realise that the company CNP you are buying and selling on the ASX does not own $26.6bn of assets, nor does it have $17.9bn worth of debt. If you are making your investment decisions based on this assumption, I would stop immediately.
To be very clear, CNP 'owns' very few properties directly. However, it either:
1. Part-owns funds (such as DPF and DPFI) which in turn part own other entities which themselves own properties. 2. Part-owns funds which themselves own properties (such as CAF).
The other part-owners in this structure are retail investors, wholesale investors, funds, etc. Each of the funds has their own borrowings, some of which will be unaffected by the current situation.
CNP 'manages' and gives its name to the entire group.
If the ASX listed company CNP goes under, the funds will lose their manager and co-owner but most of them will be fine. CNP's part-ownership in the funds will be sold and another manager found.
As an example, CAF is 41% owned by CNP and has only $0.7bn in debt not due until after 12m. If CNP dies, the 41% share of CAF will be sold to a superannuation fund or similar and the proceeds realised as part of the liquidation.
This structure, whilst very complex and cumbersome is in some ways working in CNP's favour in the current crisis (in other ways it's not - i.e. trying to get investors and journos to understand it).
A lot of the debt is unsecured and because CNP directly owns very few properties, the banks cannot walk in and take over the physical property assets as payment.
As soon as I got my head around the structure, the individual balance sheets and how the whole group operates, it made my investment decision much much easier. All of this information is available on the Centro website or ASX announcements pages. It may be worth revisiting.
CNP Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
