puzzle solved - gr great job

Okay, have finally got the full picture in my head and will share it.

Objectives of the lenders are to get their money back & hopefully participate in some upside. Objective of GR is to increase SP with minimal dilution to shareholders.

So desired outcome is for CNP to have the goal of increasing SP & reduce debt and giving some upside to the lenders.

they have achieved this.

- Hybrid structure (with maximum dilution of 90.1%) gives GR & CNP every incentive to increase the SP & reduce debt - b/c if CNP can increase the share price, then they can raise capital and pay out the note holders. Note holders get their money back with interest. If not, then lenders will own the company in 7 years time and can handle an orderly sell of the assets (without going into administration unless the s/h do not agree to the conversion)

- the 14.9% equity issue to the lenders for 'fees' had me baffle - but now I realize that the reason is to give lenders the chance to participate in the upside of Centro if the SP recovers (clever because it gets them on board and could be the negotiating tool to capitalse the interest)

- Current shareholders maintain control of the group (but with 14.9% now held with lenders) without the bank running the show for at least 7 years.

- Interest capitlization & no dividends also gives more cashflow back to CNP to reduce debt quicker and if the cycle turn and assets are revalued upwards and with an accelerated debt reduction plan, then all of a sudden, the business is looking extremely profitable.

So the combination of the above along with the long term extension of $4B debt by 3 years is a winner for me. Share dilution will NOT happen if CNP can get it right. And we have 7 long years to do it and the right structure to do it.

The alternative of a simple debt extension for the full lot will not cut it. Simply b/c there is no incentive for Centro to pay off the debt quickly and they will be at the same situation again in 3 years time.

okay, going to bed now. Have been puzzling me why GR had proposed the structure but it does truly make sense to me now.

If only the likes of businessspectators can get on to the plan that GR has put in placed with the banks.