My pleasure. I hate personal attacks with a vengeance. We're all here for one reason (well most of us anyway) - to share views and ideas so that we make sound and profitable investments.
But in my view this is because of their high debt ratio as their income as far as I know is able to meet repayments.
Agree to the extent that the key issue lies with their debt structure, but not to the extent that their LVR is under threat. Even though their income may be able to meet repayment, it is more of a cashflow liquidity issue as a result of the head company using short term debt instruments to fund long term debt commitments.
As far as I am concerned, the most likely outcome will be the sale of a combination of outperforming as well as underperforming assets to remove their short term debt obligations, as well as equity injection from the likes of Blackstones to ensure sufficient liquidity to meet further short term debt maturity (due in 12 months's time). It would also not surprise me a bit if their distribution this year is reduced to around 10-15cps in order to preserve capital in the head company, which would still give me a yield of around 12%.
Cheers, 618
CNP Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
