True, the big end of town wants the assets - cheaply of course. However, the lenders - here and in the US - will probably not want to let this go as the effect on their bottom line will be substantial.
I understand Centro is not compelled to sell assets to repay debts at this time - 10 weeks from now the situation may be different, however in that time Centro will have the opportunity to review their business - in the light of the banks prudential requirements - and at that time the banks will either support Centro or not.
The first indicators for SH of the state of Centro will be the accounts to be made public on 28th Feb. If profits are being made and can be demonstrated to be stable, the banks should be further satisfied that Centro is a viable business - even in the current climate.
At this time I can't see dividends being announced, however the earnings per share will also be a measure of the viability of the group. However, I am hoping a dividend will be announced, as the positive effects for the group in the market place would be substantial and again, be an indicater of a business operating successfully and able to pay its debts.
This might sound rosy, but the issue was never about Centro's viability but effectively, about its lenders not being able to lend. Centro could have avoided this mess if they had thought longer term and had the insight to see the issues evolving in the financial markets early, instead they thought only in terms of a cheaper lending rate (to be negotiated on a long term basis) - not in terms of whether they could actually get the funds needed!
BTW, PWC is claiming that they were misled about some of Centro's non-current debt. In my book, as auditors, they failed to investigate this aspect and confirm magnitude and nature of the major numbers in the accounts and therefore as a result, did not find the "error" and could not therefore advise Centro before the accounts were published - it is to me an example of taking the audit fee and not doing the work professionally. On this basis, if SH want to sue someone (over the massive drop in sp after these accounts were made public and the "error" recognised), the auditors should at the very least be co-defendents, since they contributed to mis-information and failed to protect their client from adverse the reactions arising from this error.
CNP Price at posting:
0.0¢ Sentiment: ST Buy Disclosure: Held
